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Markets Update: US Stocks Slide, APAC Mixed, Tariffs on Chinese Goods Eyed, European Futures Point Lower.
Economic Calendar
Global Markets Roundup: 21 Dec 2023
Wall Street tumbled in the afternoon, with technical factors, hefty short-term put options volume, and thin holiday trading cited as culprits. The downbeat sentiment spilled over to Asia-Pacific markets, which mostly traded lower despite a lack of major catalysts. Mainland Chinese stocks, however, managed to eke out gains. Adding to the market jitters, The Wall Street Journal reported that the Biden administration is considering raising tariffs on some Chinese goods, including electric vehicles, in a bid to protect US clean energy against cheaper Chinese exports. European equity futures indicate a softer open, with the Euro Stoxx 50 down 0.6% after Wednesday's flat close.
Australia's ASX 200 saw the steepest declines, particularly in tech and gold stocks. The index briefly dipped below 7,500, highlighting investor skittishness towards these sensitive sectors. Japan's Nikkei 225 underperformed throughout the session, with consumer-driven industries facing headwinds. The yen's recent strength further weighed on the index. Hong Kong's Hang Seng initially mirrored the broader risk-off sentiment but pared back losses later, with tech and energy sectors among the main drags. Meanwhile, the Shanghai Composite Index bucked the trend, buoyed by a sizeable liquidity injection from the People's Bank of China (PBoC).
Currencies: DXY consolidated after Wednesday's rally, trading within a tight 102.25-42 range. Upside capped by Monday/Tuesday highs (102.63/64) and 15th December high (102.64). Downside supported by Wednesday's low (102.14) and Tuesday's low (102.06). EUR/USD mirrored DXY with muted trading and limited newsflow. GBP/USD remained subdued post-UK inflation, finding support at its 21 DMA (1.2630) and resistance at 1.2650. USD/JPY lagged due to mild JPY strength and broader risk aversion despite lacking specific headlines. AUD and NZD diverged: AUD lifted by DXY weakness and strong base metals, while NZD was capped by rising AUD/NZD above 1.0800. PBoC set USD/CNY mid-point at 7.1012 vs exp. 7.1401 (prev. 7.0966).
Fixed Income: 10-year UST futures remained rangebound after Wednesday's steepening, with the 20-year auction seeing weak demand. Bund futures followed Wall Street gains, oscillating around 138.00 overnight. 10-year JGB futures softened slightly, paring back BoJ-driven gains, with the 10-year yield back above 56bps after yesterday's low of 55.3bps. US Treasury auctioned USD 13bln of 20-year bonds at 4.213%, with weaker demand compared to historical averages.
Commodities: Crude oil futures were initially pressured by risk aversion but later pared losses, lacking clear drivers. Spot gold mirrored DXY, remaining uneventful within recent ranges. Copper futures traded sideways despite the negative sentiment across APAC.
Key data releases on the horizon include UK Public Sector Net Borrowing, US final GDP and PCE figures, the Philadelphia Fed Business Index, Initial Jobless Claims, Canadian Retail Sales, Japanese CPI, the CBRT policy announcement, the ECB's 5-year capital key adjustment, and a speech by ECB's Lane.
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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