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Markets Update: APAC Stocks Downbeat, DXY Edges Lower, North Korea Missile Launch.
Economic Calendar
Global Markets Roundup: 18 Dec 2023
APAC stocks traded mostly lower on Monday, following a weekend heavy with geopolitical headlines and as markets prepare for the Christmas break. The US Dollar Index (DXY) held a downward bias, trading on either side of 102.50 within a 102.44-63 range, amid light macro newsflow and ahead of this week's Bank of Japan (BoJ) meeting and US Personal Consumption Expenditure (PCE) data. North Korea fired a long-ranged intercontinental ballistic missile (ICBM) overnight, which landed outside of Japan's exclusive economic zone (EEZ). The missile could have a range covering all of the United States, according to AFP citing Japanese officials. Federal Reserve (Fed) Governor Raphael Bostic said that rate cuts are not "an imminent thing," but he left the door open for potential rate reductions in March. European equity futures are indicative of a softer cash open, with the Euro Stoxx 50 future down 0.2% after cash markets closed 0.2% higher on Friday.
The ASX 200 seeing losses in the Gold and Energy sectors somewhat cushioned by modest gains in Tech. The Nikkei 225 fell at the open with the deepest losses seen in Real Estate and Financial stocks, although the index trimmed losses after finding support near 32,500, while traders also look ahead to the BoJ announcement on Tuesday. The Hang Seng and Shanghai Comp were lower, with the former seeing losses in Financials and Property stocks, while the latter was initially cushioned with PBoC resuming cash injections via 14-day reverse repos to meet year-end liquidity demands. US equity futures (ES +0.3%) held an upward bias overnight but with price action capped ahead of US PCE. European equity futures are indicative of a softer cash open, with Euro Stoxx 50 future -0.2% after cash markets closed +0.2% on Friday.
FX The US Dollar Index (DXY) held a downward bias, trading in a narrow range around 102.50 ahead of key economic data and central bank meetings this week. The Euro (EUR) rose to regain the 1.09 level as the US Dollar weakened, but the pair remains some distance from Friday's high of 1.1003. The British Pound (GBP) edged higher in line with the broader Dollar weakness, but met resistance at 1.2700. The Japanese Yen (JPY) traded below its 200-day moving average (142.56) in a range between 142.08 and 142.45, as traders await the Bank of Japan (BoJ) meeting on Tuesday. The Australian Dollar (AUD) and New Zealand Dollar (NZD) were supported by the People's Bank of China's (PBoC) additional liquidity injection and a firm CNY fixing. The NZD outperformed after the Performance of Services Index (PSI) rose back into expansion territory.
FIXED INCOME 10-year US Treasury futures edged higher overnight but remained within Friday's range. German Bund futures traded flat, holding onto a bulk of Friday's Purchasing Managers' Index (PMI)-induced gains. 10-year Japanese Government Bond (JGB) futures held an upward bias ahead of the BoJ meeting, where no changes are expected.
COMMODITIES Crude oil futures initially rose on the back of weekend geopolitical headlines, but later waned amid the broader risk-off sentiment. Spot gold saw modest support from a slightly weaker US Dollar, but gains were limited. Copper futures traded on a softer footing due to the prevailing risk aversion, but later recovered slightly as the Dollar dipped. Baker Hughes Weekly Rig Count (15/Dec): Oil rigs -2 at 501 (first decline in 5 weeks) - Natural gas rigs unchanged at 119. Russian Deputy Prime Minister Alexander Novak: Russia to increase oil export cuts as part of the OPEC+ deal in December - Additional cuts to exceed 300,000 barrels per day (bpd) by May-June - Russian oil exports to be lower than 247 million tonnes in 2023
Looking ahead, key highlights include German Ifo, Canadian National Association of Home Builders (NAHB) index, New Zealand Trade Balance, European Central Bank (ECB)'s Luis de Guindos and Philip Lane, and Bank of England (BoE)'s Ben Broadbent.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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