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Markets Update: Asian Stocks Fall on Tech Weakness, But China and Hong Kong Outperform
Economic Calendar
Global Markets Roundup: 26 Oct 2023
APAC stocks traded lower on Thursday, tracking Wall Street losses. Mainland China saw the shallowest decline, while Hong Kong and Japan suffered steeper falls. Meta shares fell after-market despite rising post-earnings, as investors focused on the company's disappointing fourth-quarter guidance. The US dollar found firmer footing, while G10 currencies weakened. European equity futures point to a softer open.
Australia's ASX 200 index was dragged lower by its tech sector, mirroring a similar sectoral performance seen in the United States. Japan's Nikkei 225 index also saw its losses led by the tech sector, while the yen's weakness against the US dollar failed to cushion the downside for the index. South Korea's KOSPI index saw its chip sector languish, facing added headwinds as SK Hynix slumped over 4% post-earnings. Hong Kong's Hang Seng index and China's Shanghai Composite index opened lower, but their losses were shallower than those of their regional peers, potentially amid stimulus optimism. Reports before the Chinese market opened suggested that US President Biden was expected to meet with Chinese Top Diplomat Wang Yi on Friday at the White House. Overall, the sentiment in Asian markets was cautious on Thursday, as investors weighed the risks of rising interest rates and a potential recession against the hopes of government stimulus and an improvement in US-China relations.
FX
The US Dollar strengthened on Thursday, with the DXY index trading north of 106.50. This was supported by higher US Treasury yields and a pick-up in geopolitical worries.
EUR/USD and GBP/USD softened against the stronger Dollar. EUR/USD is on standby ahead of the ECB meeting next week, while GBP/USD dipped below 1.2100 overnight.
USD/JPY extended gains above 150.00, with the Japanese officials singing from the same hymn sheet and keeping the pair buoyed.
Antipodeans lagged amid the broader risk tone, with NZD/USD falling below 0.5800 and AUD/USD dipping under 0.6300. RBA Governor Bullock offered mixed commentary despite more analyst calls for a November hike.
Commodities
Crude futures held onto the prior day's gains, with Brent crude trading above USD 93 per barrel.
Spot gold drifted higher overnight despite upticks in the Dollar, in what appeared to be risk-induced gains.
Copper futures were flat overnight, following the prior session's slide. Optimism surrounding Chinese stimulus kept the red metal cushioned.
Fixed Income
10-year US Treasury futures were flat, following Wednesday's bear-steepening amid a poorly digested 5-year auction. Hawkish BoC tones and hot US new home sales data added pressure ahead of an expected rebound in Thursday's Q3 US GDP data.
Bund futures edged lower overnight and remained sub-128 as traders gear up for the upcoming ECB meeting.
10-year JGB futures were also subdued, with the 10-year Japanese debt yield edging towards 90 basis points as participants look ahead to potential fireworks by the BoJ next week.
Key events to watch in the coming days:
US GDP, PCE Prices Advance
IJC, ECB & CBRT Policy Announcements
Speeches by ECB's Lagarde & BoE's Cunliffe
Earnings: BNP Paribas, Danone, Evolution, Hellofresh, Mercedes Benz, STMicroelectronics, Saint Gobain, TotalEnergies, Volkswagen; Standard Chartered, Unilever, WPP; Valero, Comcast, UPS, Southwest, Mastercard, Merck & more
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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