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Markets Update: APAC Stocks Advance, DXY Retreats, European Futures Flat, OPEC+ Cuts Not Imminent.
Economic Calendar
Global Markets Roundup: 20 Nov 2023
Asia-Pacific stocks were mostly positive on Monday, albeit with gains capped amid the lack of fresh catalysts from over the weekend. Investors are awaiting this week's key events, including tomorrow's FOMC minutes release. The US Dollar Index (DXY) was pressured and trickled further beneath the 104.00 level amid gains in its major peers. The People's Bank of China (PBoC) maintained loan prime rates (LPRs) as expected. European equity futures are indicative of a flat open, following the cash market's +0.9% close on Friday. In geopolitical news, Yemen's Houthis said they will target all ships owned and operated by Israeli companies or carrying the Israeli flag. The Houthis later announced that they seized an Israeli ship and took it to a Yemeni port. In energy news, Energy Intel's Bakr said she hasn't heard of any 'additional' OPEC+ production cuts being discussed at this time.
ASX 200 Edges Higher, Nikkei Swings, Hang Seng and Shanghai Comp Outperform on Tech Resilience and Property Support - The Australian ASX 200 index finished marginally higher on Monday, buoyed by strength in the energy and financials sectors. Gains in these sectors were partially offset by losses in utilities and miners. The subdued performance of the broader index can be attributed to the quiet data calendar, which further added to the non-committal mood among investors. Meanwhile, the Japanese Nikkei 225 index swung between gains and losses throughout the trading session. An early rally saw the index climb above 33,850, its highest level since 1990, before wiping out all its gains and more. This volatile performance reflects the ongoing uncertainty in the global economy. In contrast, the Hong Kong Hang Seng index and the Chinese Shanghai Composite index both outperformed their regional counterparts. The resilience of the tech sector and the property sector's underpinning by support pledges were the key drivers of these gains. China's decision to unsurprisingly maintain its benchmark 1-year and 5-year loan prime rates (LPRs) also provided some support to sentiment.
FX and Commodities Mixed, DXY Retreats, OPEC+ Cuts in Focus, Gold Flat, Copper Extends Gains
FX
The US Dollar Index (DXY) was pressured and trickled further beneath the 104.00 level on Monday amid gains in its major peers. Lighter-than-usual volumes are expected this week due to the US Thanksgiving holiday.
EUR/USD eked out marginal gains amid the softer dollar, with an early platform at the 1.0900 level. GBP/USD edged closer to the 1.2500 handle ahead of the Autumn Statement scheduled for mid-week. UK Chancellor Hunt is said to be considering income tax and national insurance cuts. USD/JPY mirrored the flimsy risk tone in Tokyo, with early upside reversed after hitting resistance at the 150.00 level. AUD and NZD were underpinned by a firmer reference rate setting by the PBoC. NZD/USD outperformed after it reclaimed the 0.6000 handle and with New Zealand PM-elect Luxon moving closer to establishing a coalition government. The PBoC set USD/CNY mid-point at 7.1612 vs exp. 7.2320 (prev. 7.1728).
COMMODITIES
Crude oil futures resumed last week's late recovery amid expectations that OPEC+ could support prices. Sources noted last week that the group is set to consider additional cuts when it meets on November 26th. Energy Intel's Bakr said she hasn't heard of any 'additional' OPEC+ cuts being discussed at this time. Russia's Gazprom and Venezuela's PDVSA are to discuss new gas projects in Venezuela.
Spot gold initially prodded Friday's lows but then reverted to flat territory north of USD 1980/oz. Copper futures extended on recent gains with prices helped as the mood in China mildly improved.
Key takeaways:
APAC stocks advance modestly
European futures flat
Houthis seize Israeli ship
ASX 200 edges higher on energy and financials strength
Nikkei 225 swings between gains and losses
Hang Seng and Shanghai Comp outperform on tech resilience and property support
China maintains LPRs as expected
DXY retreats below 104.00
EUR/USD ekes out marginal gains
GBP/USD edges closer to 1.2500
USD/JPY mirrors flimsy risk tone in Tokyo
AUD and NZD underpinned by firmer reference rate
Crude futures resume late recovery
No imminent OPEC+ cuts seen
Spot gold flat
Copper extends gains
Looking ahead, key highlights include German Producer Prices, US Leading Index Change, New Zealand Trade, speeches from ECB's Lane and de Cos, BoE's Bailey, RBA's Bullock and Schwartz, supply from the US, and earnings from Zoom Video Communications.
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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