_edited_edited.png)
Markets Update: Quiet Asia session sees higher equities; CN PMI mixed; Market absorbs BOJ YCC tweak;
Economic Calendar
Global Markets Roundup: 31 June 2023
APAC Stocks Mostly Higher as Investors Digest China's Support Efforts and Mixed PMI Data
Stocks in Asia-Pacific were mostly higher on Monday as investors digested the latest support efforts from China and mixed PMI data.
The Shanghai Composite Index rose 0.4%, while the Hang Seng Index in Hong Kong gained 0.7%. The Nikkei 225 in Japan climbed 1.1%, and the Kospi in South Korea advanced 0.5%. The gains came after China's government announced a series of measures to support the economy, including tax cuts and increased infrastructure spending. However, the mood was tempered by mixed PMI data.
The euro was trading just above the 1.10 mark, while the yen was weaker against the dollar. The Australian dollar and New Zealand dollar were the best performers among the major currencies. The market is looking ahead to a busy week of economic data, which could provide some direction for the markets.
The official manufacturing PMI for China came in slightly above expectations, but the non-manufacturing PMI fell to its lowest level since December 2022.
The Australian market lagged, with strength in the commodity-related sectors offset by weakness in consumer stocks and financials. The mood was cautious ahead of tomorrow's RBA rate decision, where there is a discrepancy between money markets pricing and analysts' median expectations on whether the central bank will hike or pause.
The Japanese market was boosted from the open and rose back above the 33,000 level amid a weaker currency and as markets digested the BoJ's recent shift to a more flexible approach. The central bank announced unscheduled bond purchases and participants also shrugged off disappointing Industrial Production data.
The Chinese markets were higher amid stimulus-related optimism. Chinese officials are set to announce more measures for consumption, recovery and expansion, while the NDRC said it will solidly promote development and reform, as well as stick to the general principle of making economic stability a top priority. Furthermore, mixed official PMI data from China failed to dampen the mood.
US equity futures are marginally lower with mild headwinds seen after the mixed Chinese PMI data.
Here is a summary of the key movements in FX, fixed income, and commodities: FX
The dollar was firmer amid the mixed performance seen in major counterparts.
The euro was uneventful and sat just north of 1.1000.
The pound traded sideways with participants lacking conviction ahead of this week's BoE rate decision.
The yen weakened against the dollar, while the Australian and New Zealand dollars were the best performers among the major currencies.
Fixed Income
10-year Treasury futures traded marginally lower after last Friday's attempts to recover losses waned heading into month-end and this week's key risk events culminating in the latest US NFP report.
Bund futures were subdued amid the positive mood and lack of fresh insight from ECB's Lagarde.
10-year JGB futures continued their post-BoJ selling as Japanese yields climbed which saw the 10-year yield at the highest in 9 years and above 0.60% but with further upside in yields capped after the BoJ announced an unscheduled purchase operation for JPY 300bln in JGBs with a residual maturity of 5yr-10yr.
Commodities
Crude futures faded some of last week's gains amid headwinds from the latest Chinese data although WTI crude just remains above the USD 80/bbl level.
Spot gold was marginally pressured as the dollar gradually strengthened overnight.
Copper futures struggled for direction as participants digested mixed Chinese PMI data and the latest support pledges.
Looking ahead, investors will be watching a number of key economic data releases this week, including German retail sales, the ECB Survey of Monetary Analysts, and the EZ Flash CPI. In FX, the dollar was slightly stronger against most major currencies.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team