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Markets Update: APAC Capped by Earnings, Yields; Europe Faces Softer Open; Market Stays On Hold as Data Looms, Commodities Consolidate Gains; Thursday Highlights; Regional Stocks Edge Higher Following China's Support Measures.
Economic Calendar
Global Markets Roundup: 25 Jan 2023
Asian markets closed mostly positive but gains were capped as investors digested a flurry of earnings reports and the recent rise in global yields. The Nikkei 225 and Hang Seng rose modestly, while the ASX 200 ended flat. European equity futures point to a softer open after the cash market enjoyed a strong rally on Wednesday. The Euro Stoxx 50 future is down 0.1%, reflecting cautious sentiment heading into a busy economic data calendar. Dollar finds renewed strength: The DXY is back above 103, EUR/USD struggles to remain above 1.09, and USD/JPY edges closer to 148 as risk appetite weakens. Tesla disappoints: Shares of Tesla (TSLA) tumbled 6% after-hours as their Q4 earnings missed analyst expectations. Lower-than-expected 2024 vehicle growth forecasts added to the selloff.
Australia's ASX 200 notched mild gains of 0.06%, with resource stocks leading the charge. BHP Group and Rio Tinto climbed over 1.5% each, benefiting from a rise in iron ore prices. However, losses in rate-sensitive financials capped the index's advance. Japan's Nikkei 225 finished the day marginally positive at 0.11%, lagging behind its regional peers. The index briefly dipped below the 36,000 level before recovering on renewed buying in technology and chip-related stocks. Hong Kong's Hang Seng soared 3.56%, outperforming the region. Tech giant Alibaba surged 7.32%, while energy conglomerate ENN Energy jumped 9.09%. The rally was fueled by mainland investors catching up to China's recent support measures, including a 50 basis point cut in the reserve requirement ratio, which will inject CNY 1 trillion into the financial system. China's mainland markets also reacted positively to the RRR cut. The Shanghai Composite Index jumped 1.8%, while the Shenzhen Component Index gained 1%. Notably, China Unicom Hong Kong and AVIC Capital saw significant gains, rising 8.32% and 10.14%, respectively.
Dollar Holds Steady: The DXY U.S. Dollar Index recovered from a dip below 103.00 on Wednesday, ending the day little changed. Yields provided some support, but traders remained cautious ahead of Thursday's U.S. GDP and Jobless Claims data. Euro Muted: EUR/USD traded sideways after failing to hold above 1.0900, with traders looking towards the upcoming ECB policy decision for fresh impetus. Sterling Steady: GBP/USD lacked direction following a recent pullback, finding support around 1.2700 and its 21-day moving average. Yen Takes a Breather: USD/JPY paused after its climb back from below 147.00, lacking fresh catalysts in the absence of new macro drivers. AUD and NZD Rangebound: The Australian and New Zealand dollars traded within tight ranges in quiet Asian trade, with China's recent economic optimism fading somewhat. PBoC Guides Yuan Lower: The People's Bank of China set the USD/CNY mid-point weaker at 7.1044, compared to market expectations of 7.1620.
Bonds Seek Stability: U.S. 10-year Treasury futures steadied after Wednesday's selling, triggered by strong data and a weak 5-year auction. German Bund futures recovered from initial weakness but remained subdued amidst recent supply and the approaching ECB meeting. Japanese 10-year JGB futures continued their post-Bank of Japan softening after a lackluster 40-year auction.
Oil Holds Gains: Crude futures remained rangebound but clung to Wednesday's gains, supported by Chinese economic measures, heightened Middle East tensions, and bullish U.S. crude inventory data. U.S. Delays LNG Decision: The White House reportedly delayed a decision on a major natural gas export terminal, raising environmental concerns and throwing the project into uncertainty.
Gold Languishes: Spot gold hovered near its lows for the week, pressured by robust U.S. economic data and key events on the horizon. China Boosts Gold Demand: Chinese gold consumption rose in 2023, signaling continued interest from the world's largest gold market. Copper Holds Firm: Copper futures softened slightly but retained most of their gains from the recent China-driven rally.
Data deluge ahead: Investors brace for a packed economic calendar tomorrow, with highlights including German Ifo, US Building Permits, Durable Goods, GDP Advance, PCE Prices, and Tokyo CPI. Central bank decisions from the ECB, Norges Bank, CBRT, and SARB are also on the agenda. Central bank chiefs speak: ECB President Lagarde and Norges Bank Governor Bache hold press conferences following their respective policy announcements, offering key insights into monetary policy stances. Earnings watch: Supply from Italy and the US includes companies like Nokia, STMicroelectronics, LVMH, Intel, Visa, and Blackstone. Investors will be looking for clues on the health of various sectors amidst the current market uncertainty.
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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