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Markets Update: Asian Markets Mixed Ahead of Data Releases
Economic Calendar
Global Markets Roundup: 25 Sep 2023
APAC stocks traded with a mostly negative bias on Monday, with Evergrande cancelling its creditor meeting and scrapping its USD 35 billion debt restructuring plan. European equity futures are indicative of a softer open, with Euro Stoxx 50 futures down 0.2%. This follows a 0.1% decline in the cash market on Friday.
The US dollar index (DXY) is contained above 105.50, while the euro (EUR) is trading below 1.0650 against the dollar. The Japanese yen (JPY) and the antipodeans (AUD/NZD) are trading narrowly lower. House Republicans are considering a stopgap measure that would range from 14 to 60 days. This is in an effort to avoid a government shutdown at the end of the month.
The ASX 200 closed marginally lower on Monday, with losses in mining stocks and financials overshadowing the resilience in the consumer and tech sectors.
Nikkei 225
The Nikkei 225 outperformed other Asian markets, buoyed by stimulus hopes. The Japanese government is considering 5-10 year tax benefits for firms producing semiconductors and storage batteries, as well as providing support in areas where firms face high entry risk. The government is also reportedly considering boosting take-home pay for part-time workers.
Hang Seng and Shanghai Comp The Hang Seng and Shanghai Composite indices were pressured by developer-related concerns. Evergrande shares fell more than 20% after the company cancelled its creditor meeting and scrapped its USD 35 billion debt restructuring plan. The company said it is unable to issue new debt under the present circumstances due to an investigation into its subsidiary Hengda Real Estate. Additionally, China Aouyuan shares dropped by over 70% on the resumption of trade following a 17-month hiatus.
FX
The US dollar index (DXY) traded flat on Monday as the US moved closer to the deadline to avert a government shutdown. House Republicans are considering a stopgap measure that would range from 14 to 60 days.
The euro (EUR) was rangebound near 1.0650 against the dollar. ECB's Villeroy said that the recent increase in oil prices will not derail the ECB's fight to tame inflation and that patience is more important than raising rates further.
The British pound (GBP) languished near its 6-month lows after last week's declines. PM Sunak is facing backlash after the government refused to rule out scrapping the northern leg of the HS2 rail project.
The Japanese yen (JPY) traded sideways and held on to the 148.00 handle amid a quiet calendar.
The antipodeans (AUD/NZD) marginally weakened amid the mostly glum mood and Chinese developer woes.
The PBoC set the USD/CNY mid-point at 7.1727, weaker than the expected 7.2983.
FIXED INCOME
10-year US Treasury futures marginally eased back after Friday's partial recovery. Fed's Daly said that they stood pat on rates in recognition that they are closer to the destination.
Bund futures were uneventful ahead of German IFO data scheduled today and with the latest German CPI inflation data scheduled later in the week.
10-year JGB futures were kept afloat and eventually edged higher on return from the Tokyo break.
COMMODITIES
Crude oil futures were choppy owing to the lack of drivers and mostly negative bias in Asia. Saudi Foreign Minister said the kingdom is keen to maintain stability, reliability, sustainability, and security of oil markets. EU energy official said Europe will have to rely on US fossil fuels for decades.
Spot gold was rangebound with prices contained alongside an uneventful greenback.
Copper futures traded flat and languished near Friday's lows amid the subdued risk tone.
Overall, markets were cautious on Monday, with investors awaiting the release of key economic data and the outcome of the US government funding negotiations. The US dollar and fixed income markets were relatively quiet, while crude oil and copper futures traded choppily.
Looking ahead, the highlights of the week include the German Ifo (September) and the US National Activity Index (August).
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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