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Markets Update: APAC Stocks Mostly Higher as RBA Holds Rates, Euro Stoxx 50 Flat
Economic Calendar
Global Markets Roundup: 01 Aug 2023
Asian stocks were mostly higher on Tuesday, following the positive lead from Wall Street where the S&P 500 notched its fifth consecutive monthly gain.
The Reserve Bank of Australia (RBA) maintained its cash rate target unchanged at 4.10%, as expected. The RBA noted that some further tightening of monetary policy may be required, but that the pace of tightening will be gradual.
The Australian dollar (AUD) lagged after the RBA decision, while the Japanese yen (JPY) was also on the backfoot. The US dollar (USD) was mixed, oscillating around the 102 mark. The euro (EUR) was slightly weaker against the USD, trading just below 1.10.
European equity futures were indicative of a flat open, with the Euro Stoxx 50 unchanged after the cash market closed up by 0.1% yesterday.
Here is a summary of the key movements in FX, fixed income, and commodities:
FX
The USD marginally extended on gains and reclaimed the 102.00 status after having ignored the month-end sell-side models which pointed to dollar selling.
EUR/USD remained lacklustre at a sub-1.1000 level after giving way to the dollar's strength.
GBP/USD was subdued amid a lack of catalysts and ahead of the BoE rate decision later in the week.
USD/JPY continued on its advances with economists not anticipating any further policy tweaks from the BoJ this year and government officials also voiced their opinion that last week’s BoJ decision was meant to increase the sustainability of monetary easing and was not a shift in the monetary easing stance.
Antipodeans were pressured after weak Australian Building Approvals, the contraction in Chinese PMI data and with selling exacerbated after the RBA continued its pause on rates.
Fixed Income
10yr UST futures lacked direction after the prior day’s choppy performance and somewhat mixed US data releases, while recent comments from Fed’s Goolsbee provided little for markets to latch on to.
Bund futures traded rangebound with price action stuck near the 133.00 level ahead of final Eurozone PMIs.
10yr JGB futures just about kept afloat despite the pressure seen in the aftermath of a weaker 10yr auction.
Commodities
Crude oil prices were rangebound amid the lack of energy-specific catalysts and with further economic support efforts from China was counterbalanced by the disappointing Chinese Caixin Manufacturing PMI data.
Kinder Morgan's (KMI) El Paso Natural Gas Co. experienced an equipment failure associated with its Roswell Compressor Station and as such the station is currently unavailable, while it declared a force majeure.
Spot Gold was contained as the greenback marginally extended on its recent advances.
Copper futures were lacklustre after the latest Caixin PMI data showed a contraction in China's factory activity.
Looking ahead, key economic data releases include German unemployment rate, UK/EZ final PMI, US ISM, JOLTS, New Zealand labour data, and a speech from Fed's Goolsbee. Earnings reports will be released from Covestro, Deutsche Post, Daimler Truck, BP, Diageo, HSBC, AIG, Advanced Micro Devices, Electronic Arts, and Merck & Co.
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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