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Thursday Morning Coffee - Markets Update -12 Oct 2023- European Futures Point Higher on FOMC Minutes

Writer's picture: The Trade  Academy TeamThe Trade Academy Team

Markets Update: APAC Stocks Rise; ASX 200 Led by Financials, Hang Seng Gaps Above 18,000; European Futures Point Higher on FOMC Minutes

 

Economic Calendar

 

Global Markets Roundup: 12 Oct 2023


APAC stocks were firmer on Thursday, taking impetus from the intraday rebound on Wall Street overnight. The FOMC Minutes released on Wednesday stated that officials generally judged risks to achieving the FOMC's goals had become more two-sided, which was seen as a dovish signal by investors.

European equity futures are indicative of a higher open, with the Euro Stoxx 50 future up 0.4% after the cash market closed down 0.1% on Wednesday. The US dollar index (DXY) remains on a 105 handle, while GBP/USD and USD/JPY are back on 1.23 and 149 handles respectively. Crude futures remained subdued after having faded the entire geopolitical risk premium from the weekend.


APAC stocks were mixed on Thursday, with the ASX 200 led by outperformance in its top-weighted financial industry. The gains in the index were limited, however, as energy and the defensive sectors lagged. The Nikkei 225 was boosted on a break above the 32,000 level following softer-than-expected PPI data and comments from BoJ Board Member Noguchi who continued to toe the dovish line.

The Hang Seng and Shanghai Composite were underpinned, with the Hong Kong benchmark gapping above the 18,000 level and spearheading the advances in the region. Chinese banks were buoyed after China's sovereign wealth fund raised its stake in the largest banks for the first time since 2015.


FX The US dollar index (DXY) was flat heading into the upcoming US inflation data and after yesterday's choppy performance. The dollar briefly tested the 106.00 level to the upside but then unwound the gains as the latest bout of less hawkish Fed rhetoric offset the impulse from hotter-than-expected PPI data. EUR/USD was steady as it took a breather from the recent whipsawing through the 1.0600 level and with the latest comments from ECB officials providing very little incrementally.

GBP/USD traded rangebound after having reclaimed the 1.2300 level, with participants now awaiting the UK monthly GDP and activity data. USD/JPY was slightly higher after soft data releases and with a floor seen at the 149.00 level. Antipodeans were constrained in the absence of any pertinent data and amid a slightly softer CNH. The PBoC set the USD/CNY mid-point at 7.1776 vs exp. 7.2932 (prev. 7.1779). Russian President Putin introduced mandatory FX sales for six months for Russian companies which need to provide the central bank with plans and schedules for FX purchases and sales, in efforts to stabilize the Rouble, according to local media.

FIXED INCOME 10-year US Treasury futures remained afloat but were off intraday highs as the treasury complex took a breather from the recent pronounced flattening and following a weak 10-year auction stateside. Bund futures were steady and held on to most of the prior day's spoils, but further upside was capped by resistance near the 130.00 level. 10-year JGB futures tracked the recent gains in global peers amid soft data releases from Japan.

COMMODITIES Crude futures remained subdued after having faded the entire geopolitical risk premium from the weekend's attack on Israel, with prices not helped by the bearish weekly private sector inventory data. The EIA STEO noted that the 2023 world oil demand growth forecast was cut by 50k BPD to a 1.74mln BPD Y/Y increase, and the 2024 forecast was cut by 40k BPD to a 1.32mln BPD Y/Y increase. Kuwait set November KEC crude OSP for Asia at Oman/Dubai + USD 3.05/bbl. Spot gold slightly edged higher alongside an uneventful greenback. Copper futures eked marginal gains alongside the positive risk appetite.

Key economic data and events to watch on Thursday include:

  • UK GDP Estimate

  • UK Services, Industrial Output, and Trade Balance

  • US Core CPI

  • US Earnings

  • US IJC and Cleveland Fed CPI

  • ECB and Banxico Minutes

  • Speeches from ECB Vice President Luis de Guindos and Executive Board Member Fabio Panetta, and Fed Governors Raphael Bostic, Michelle Bowman, and Lael Brainard

  • Supply from the US and Italy

 

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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