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Markets Update: APAC Markets Higher on Improved Chinese PMI, Debt Ceiling Relief
Today's important market events:
[EUR] German Manufacturing PMI (May) - 09:55 CEST
[GBP] Manufacturing PMI (May) - 10:30 CEST
[EUR] CPI (YoY - May) - 11:00 CEST
[EUR] ECB President Lagarde Speaks - 11:30 CEST
[EUR] ECB Monetary Policy Meeting Account - 13:30 CEST
[USD] ADP Nonfarm Employment Change (May) - 14:15 CEST
[USD] Initial Jobless Claims - 14:30 CEST
[USD] ISM Manufacturing PMI (May) - 16:00 CEST
[Crude Oil Inventories] - 17:00 CEST
Global Markets Roundup: o1 June 2023
Asia-Pacific stocks rose on Tuesday after the U.S. House passed the debt ceiling bill to avert a default, which now moves to the Senate. The news helped to ease concerns about the global economic outlook and boosted risk sentiment. In China, the Caixin Manufacturing PMI data for May came in at 48.1, slightly above expectations of 48.0. The reading was still below the 50 mark that separates expansion from contraction, but it was an improvement from April's reading of 46.7. European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed down 1.7% yesterday. The U.S. dollar index (DXY) is a touch firmer on a 104 handle, EUR/USD remains stuck below 1.07, NZD and AUD diverge.
The ASX 200 was choppy in early trade but ultimately gained after stronger-than-expected capital expenditure and the improvement in Chinese Caixin PMI. The Nikkei 225 was marginally supported by data releases including business capex which grew at its fastest pace since Q3 2016 and with Japanese firms logging their largest recurring profits for Q1. The Hang Seng and Shanghai Comp. shrugged off the early indecision and were boosted after the Chinese Caixin Manufacturing PMI data partially atoned for yesterday’s weak official PMI readings. US equity futures traded rangebound and largely ignored the positive overnight developments.
European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed down 1.7% yesterday. In the currency market, the U.S. dollar index (DXY) eked slight gains after the House passed the debt ceiling bill although the upside was capped after the recent mixed data releases stateside and following the latest Fed rhetoric in which voters Jefferson and Harker suggested they were in the skip camp for the June meeting.
The euro (EUR/USD) bounced off the prior day’s lows although remained beneath the 1.0700 handle with the rebound limited after recent soft German, Spanish and French CPI figures set the backdrop for today's incoming Eurozone inflation data. The British pound (GBP/USD) was rangebound with upward momentum stalled by resistance at the 1.2450 level. The Japanese yen (USD/JPY) recouped early losses owing to yield differentials and after support held at 139.00.
The Australian dollar (AUD/USD) was the best performer among the major currencies, with gains of 0.3%. The New Zealand dollar (NZD/USD) was also higher, with gains of 0.2%.
In the fixed income market, 10-year U.S. Treasury futures were lower after the US House passage of the debt ceiling bill and the surprise expansion in Chinese Caixin Manufacturing PMI unwound some of the prior day’s dovish rate bets. Bund futures mildly pulled back after yesterday’s advances as the focus shifts to EZ inflation. 10-year JGB futures were rangebound with price action contained amid the 10yr auction results from Japan which didn't deviate much from the previous month.
In the commodity market, crude futures nursed some of the prior day's losses as risk appetite improved following the Chinese Caixin PMI data but with gains capped by a bearish private-sector inventory report. US Private Inventory (bbls): Crude +5.2mln (exp. -1.4mln), Cushing +1.8mln, Gasoline +1.9mln (exp. -0.5mln), Distillate +1.8mln (exp. +0.9mln). Russian plans to halve subsidies for oil refiners may be postponed until September, according to Interfax citing sources.
However, the Russian Finance Ministry said no final decision on oil and gas sector subsidies has been taken yet. Spot gold traded sideways after the recent mixed US data and a slightly firmer dollar. Copper futures gained after the surprise expansion in Chinese Caixin Manufacturing PMI. Codelco Chairman said the price of metal appears solid going forward and is optimistic about long-term trends in the global copper market but added some price volatility is to be expected in the current market uncertainty.
Looking ahead, highlights include:
U.S. ISM Manufacturing PMI
Challenger Layoffs
ADP
IJC
EZ Flash CPI & Unemployment Rate
EZ, US & UK Manufacturing PMIs
ECB Minutes
BoE DMP
Remarks from Fed's Harker, ECB's Lagarde & Enria, Supply from Spain & France
Overall, market sentiment is positive on Tuesday as investors welcome the news of the debt ceiling relief and the improved Caixin PMI data. However, there are still some concerns about the global economic outlook, and investors will be closely watching the upcoming economic data and central bank speeches for further clues about the direction of monetary policy.
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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