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Markets Update: US Stocks Finish Lower in Choppy Session; APAC Stocks Mostly Rangebound ; US-CN trade war deepens (as expected); Markets await US CPI;
Economic Calendar
Global Markets Roundup: 10 Aug 2023
US stocks finished lower on Wednesday in a choppy session, with catalysts extremely light. The S&P 500 fell by 0.3%, the Dow Jones Industrial Average fell by 0.2%, and the Nasdaq Composite fell by 0.1%.
The decline in stocks came as investors digested a slew of earnings releases and looked ahead to the upcoming US Consumer Price Index (CPI) data. The CPI is expected to show that inflation rose in June, which could put pressure on the Federal Reserve to raise interest rates more aggressively.
Asian stocks were mixed on Thursday, with the regional bourses mostly rangebound amid a slew of earnings releases and with the mood tentative. The Nikkei 225 fell by 0.1%, the Hang Seng Index rose by 0.2%, and the Shanghai Composite rose by 0.3%.
European Equity Futures Indicative of a Firmer Open
European equity futures are indicative of a firmer open with the Euro Stoxx 50 +0.6% after the cash market closed up by 0.7% yesterday. Investors are awaiting the release of the US CPI data, which is expected to show that inflation rose in June.
DXY Trades Flat Around the 102.50 Level The US dollar index (DXY) traded flat around the 102.50 level as participants lacked conviction heading into the US CPI data. 10-year US Treasury yields were marginally lower, Bund yields remained subdued, and 10-year JGB yields declined.
ASX 200 Rangebound, Energy Sector Outperforms
The Australian stock market was rangebound on Thursday, with the ASX 200 closing down 0.1%. The energy sector was the standout performer, with oil prices at a 9-month high and following the recent surge in gas prices amid disruption concerns with strike action planned for Australian LNG. Woodside Energy provided some optimism on the bargaining process, noting that positive progress was being made and an in-principle agreement was reached on a number of issues.
Nikkei 225 Choppy After Mixed PPI Data
The Japanese stock market was choppy on Thursday, with the Nikkei 225 closing down 0.3%. The market was initially boosted by yen weakness, but was then weighed down by mixed PPI data and newsflow dominated by earnings releases. The biggest individual stock movers were those that released earnings reports, with some stocks performing well and others underperforming.
Hang Seng and Shanghai Comp Pressured by US Executive Order
The Hong Kong and Shanghai stock markets were pressured on Thursday, with the Hang Seng Index closing down 1.2% and the Shanghai Composite Index closing down 0.9%. The sell-off was triggered by US President Biden's executive order to ban some new investments in ‘narrow subsets’ of Chinese sensitive technologies such as semiconductors and microelectronics, quantum information technologies and certain AI systems. The order drew criticism from China, which said it would harm the global economy.
The US dollar index (DXY) traded flat around the 102.50 level as participants lacked conviction heading into the US CPI data. The euro (EUR) was uneventful with the single currency contained as participants brace for the upcoming major risk event and after the single currency recently hit resistance just shy of the 1.1000 handle. Sterling (GBP) struggled for direction amid the lack of catalysts and with Prime Minister Rishi Sunak facing calls from the Cabinet related to withdrawing from the European Convention on Human Rights if migrant deportation flights to Rwanda are blocked. The Japanese yen (JPY) continued to tread closer toward levels where renewed jawboning could be triggered. The Australian dollar (AUD) and New Zealand dollar (NZD) were kept afloat but with gains capped by the mixed risk appetite and absence of tier-1 data. The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.1576 vs exp. 7.2023 (prev. 7.1588).
FIXED INCOME
10-year US Treasury futures were marginally lower after recent flattening and amid pre-inflation positioning. German bund futures remained subdued with price action stuck around the prior day’s worst levels. 10-year Japanese government bonds (JGBs) futures declined amid mixed PPI data and in the absence of additional Bank of Japan (BoJ) purchases.
COMMODITIES
Crude oil futures took a breather after climbing to their highest levels in 9 months. Spot gold was confined to a narrow range amid a flat dollar ahead of US CPI. Copper futures traded sideways alongside the mixed risk appetite in Asia.
Looking Ahead Highlights include:
Norwegian CPI
Italian CPI (Final)
US CPI
IJC
Chinese M2 Money Supply
New Zealand Manufacturing PMI
Banxico Policy Announcement
ECB Economic Bulletin
Speeches from Fed's Harker & Bostic
Supply from US
Earnings from:
Allianz
Deutsche Telekom
Munich Re.
Novo Nordisk
Rheinmetall
Siemens
Antofagasta
Entain
Zurich Insurance
Ralph Lauren
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team