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Markets Update: APAC Stocks Mostly Lower as Weak Global Data and Rising Yields Weigh
Today's important market events:
[GBP] Construction PMI (Jun) - 10:30 CEST
[USD] ADP Nonfarm Employment Change (Jun) - 14:15 CEST
[USD] Initial Jobless Claims - 14:30 CEST
[USD] Services PMI (Jun) - 15:45 CEST
[USD] ISM Non-Manufacturing PMI (Jun) - 16:00 CEST
[USD] JOLTs Job Openings (May) - 16:00 CEST
[USD] Crude Oil Inventories - 17:00 CEST
Global Markets Roundup: 06 July 2023
Asian stocks were mostly lower on Thursday, following the post-Independence Day hangover in the US owing to recent weak global data releases and a rising yield environment.
The Federal Open Market Committee (FOMC) minutes provided little to deviate from the current view of future rate increases, with almost all participants judging it appropriate or acceptable to leave the target rate unchanged at the June meeting.
Fed's Williams (voter) said he is not content with where inflation is right now, and that a June rate pause was the right move, but future hikes are still in play.
The dollar index (DXY) held on to the prior day's gains owing to the upside in yields and after the FOMC Minutes. However, USD/JPY pulled back from its recent advances, and the Antipodeans reversed early gains.
APAC Markets Mostly Lower as Risk Sentiment Sours Asian markets were mostly lower on Thursday, with the ASX 200, Nikkei 225, and Hang Seng all closing in the red. The decline was led by the mining and materials sectors, which were weighed down by a rise in Australian yields. The sell-off in Asia was also driven by concerns about the Chinese economy, after China's largest lenders cut rates for corporate US dollar deposits amid efforts to support the yuan. In the US, equity futures were pointing to a lower open, with the Euro Stoxx 50 down 0.5%.
The dollar held firm as the FOMC minutes hinted at more rate hikes
The dollar index (DXY) held on to its gains from the previous day, as the FOMC minutes hinted at more rate hikes in the future. The minutes showed that some policymakers would have been happy to accept a 25bps hike in June, while Fed's Williams said that he is not content with where inflation is right now and thinks that they still have more work to do on rates.
Other currencies were mixed
The euro (EUR) was lacklustre, after succumbing to the firmer dollar and recent failure to sustain the 1.0900 level. The pound (GBP) remained indecisive, with price action choppy albeit within a thin range around the 1.2700 level. The Japanese yen (JPY) pulled back from its yield-driven advances, as the Japanese currency benefitted from its haven status. The Australian dollar (AUD) and New Zealand dollar (NZD) reversed early gains, as the risk appetite in some of the key regional bourses further soured.
PBoC set USD/CNY mid-point at 7.2098
The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.2098, slightly weaker than the previous day's fix of 7.1968.
Commodities
Crude oil futures traded rangebound on Thursday, as tailwinds from recent Saudi jawboning and a larger-than-expected draw in private sector crude inventories were offset by the mostly downbeat overnight risk sentiment.
OPEC
OPEC energy and oil ministers met on the sidelines of the 8th OPEC Seminar and reviewed market conditions.
They agreed to continue consultation with their non-OPEC counterparts in continued efforts to support a stable and balanced oil market.
OPEC Secretary General said OPEC is in discussions with Azerbaijan, Malaysia, Brunei, and Mexico to join the group.
OPEC invited Azerbaijan to join the organisation, although Azerbaijan's Energy Minister said the country is currently not considering joining OPEC after an invite from the cartel.
Kuwait's minister denied that Kuwait is requesting an OPEC+ quota increase and said the country's oil output capacity will be 3.2 million barrels per day by the end of 2024.
Other commodities
Spot gold was uneventful with price action contained as the dollar held on to its gains post-FOMC Minutes.
Copper futures declined as the risk appetite in Asia deteriorated throughout the session.
Chile's Codelco estimated copper production loss of about 7,000 tons due to recent rains and it is seen ending 2023 with production at the low end of the estimated 1.35 million to 1.42 million tons range. However, the company noted that production will start recovering next year.
Overall, crude oil futures traded rangebound as market participants weighed the latest data and developments.
Looking ahead, highlights for the day include German Industrial Orders, EZ Retail Sales, US ADP, US S&P Services PMI, US ISM Services PMI, US EIA Stocks, Speeches from Fed's Logan, UAE Energy Minister, supply from Spain and France.
Overall, Asian markets were subdued on Thursday, as traders weighed the latest economic data and Fed's latest commentary.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team