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Markets Update: APAC Stocks Mixed, DXY Rangebound, AUD Slips After RBA
Today's important market events:
[EUR] German Trade Balance (May) - 08:00 CEST
Global Markets Roundup: 04 Jul 2023
Asian stocks were mixed on Wednesday, with the regional bourses mostly rangebound amid holiday-thinned conditions stateside. The dollar index (DXY) traded rangebound, while the euro (EUR/USD) and British pound (GBP/USD) lacked direction. The Japanese yen (USD/JPY) was choppy, and the Australian dollar (AUD/USD) slipped after the Reserve Bank of Australia (RBA) kept rates on hold but maintained a hawkish tone and kept the door open for future rate hikes.
Two Drones Intercepted in Russia Two drones were intercepted in the Moscow region and one in the Kaluga region on Wednesday, according to Russian press. The drones were reportedly shot down by Russian air defense systems. The incident comes amid heightened tensions between Russia and the West.
ASX 200 Up After RBA Holds Rates The Australian stock market was up on Wednesday after the Reserve Bank of Australia (RBA) kept interest rates unchanged at 4.10%. The central bank's decision was widely expected, but it did provide some support to the market, which had been under pressure in recent weeks.
The Nikkei 225 in Japan underperformed, slipping beneath 33,500. The decline was likely due to a pullback in the Japanese yen, which made Japanese stocks more expensive for overseas investors.
The Hang Seng and Shanghai Composite indices in China were both up, but with upside capped. The gains came after China announced plans to ban exports of gallium and germanium-related products from August 1st. These metals are used in high-performance chips, and the ban could disrupt supply chains for chipmakers.
US equity futures were mixed, with the S&P 500 futures up slightly. European equity futures were also up slightly.
Currency Markets
The dollar index (DXY) traded rangebound amid the holiday-thinned conditions in the US for Independence Day. The greenback was also not helped by the recent weaker-than-expected US ISM Manufacturing PMI data.
The euro (EUR/USD) lacked direction following the prior day's fluctuations through the 1.0900 level. Comments from ECB President Christine Lagarde that the central bank is "firmly committed" to raising interest rates did not provide much of a boost to the euro.
The British pound (GBP/USD) remained uneventful with price action contained by near-term resistance at the 1.2700 level.
The Japanese yen (USD/JPY) was choppy after pulling back from recent highs. The decline in the yen was likely due to the RBA's decision to keep rates unchanged, which weakened the case for further yen weakness.
The Australian dollar (AUD/USD) was pressured late in the session following the RBA rate decision. However, downside was limited as the central bank maintained a hawkish tone and kept the door open for future rate hikes.
Fixed Income Markets
10-year US Treasury futures were uneventful with cash markets in the US to remain shut for Independence Day. The prior day's tumultuous mood, which also saw the US yield curve move to its deepest inversion since 1981, continued to weigh on Treasury prices.
German bund futures remained subdued after yesterday's fluctuations and bouts of selling pressure.
10-year Japanese government bond (JGB) futures initially weakened but were later supported by increased demand at the 10-year JGB auction.
Commodities Markets
Crude oil futures rebounded overnight after the prior day's fluctuations and eventual weakness despite the announcements by Saudi Arabia and Russia on extending and deepening oil output cuts for August.
Algeria is to cut an additional 20,000 barrels per day (bpd) of oil output to support efforts by Saudi and Russia to balance and stabilize oil markets, effective during August, according to the Energy Ministry.
Libya's Oil Minister said he welcomed the Saudi decision to extend its voluntary oil output cut of 1 million bpd.
Kazakhstan's section of the Caspian Pipeline Consortium (CPC) experienced a power outage, according to Interfax citing local authorities.
Spot gold traded sideways alongside an uneventful dollar as the US celebrates Independence Day.
Copper futures were kept rangebound amid the mixed risk appetite during Asia-Pac trade.
Looking Ahead Highlights for Thursday include Canadian manufacturing PMI data and the US Independence Day holiday.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team