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Markets Update: APAC Stocks Rise as Wall Street Rebounds; ASX 200 Led by Utilities and Tech; European Futures Point to Higher Open.
Economic Calendar
Global Markets Roundup: 10 Oct 2023
APAC stocks were mostly positive on Tuesday as key markets reopened from the long weekend and followed the recovery seen on Wall Street. Stocks in the US recovered following dovish-leaning Fed rhetoric, which acknowledged the impact of higher Treasury yields on financial conditions.
European equity futures are indicative of a higher open, with the Euro Stoxx 50 future up 1.0% after the cash market closed down 0.8% on Monday. The US dollar index (DXY) is back above the 106 mark, while the Japanese yen (JPY) is marginally lagging. EUR/USD is trading just above the 1.0550 level.
The ASX 200 leading the gains. Utilities and tech sectors led the broad-based gains across sectors, and the index was unfazed by the mixed consumer and business confidence data releases.
The Nikkei 225 outperformed on its return from holiday and got its first opportunity to react to the key market themes, including last week's US jobs data, the Israel-Hamas conflict, and recent Fed rhetoric.
The Hang Seng and Shanghai Composite were mixed, with Hong Kong lifted by strength in tech and property, while the mainland lagged amid underwhelming holiday spending and lingering debt concerns after Country Garden flagged it will not be able to meet all offshore obligations.
FX
The US dollar index (DXY) was rangebound on Tuesday, but briefly tested the 106.00 level to the downside following the recent dovish Fed commentary, which suggested the recent gains in yields could mean there is less for the Fed to do.
EUR/USD took a breather amid a lack of fresh catalysts and after the prior day's intraday rebound.
GBP/USD was flat with price action contained following a return journey from sub-1.2200 territory.
USD/JPY nursed some losses after having retreated yesterday on narrowing yield differentials.
Antipodeans were initially underpinned amid the mostly positive risk tone and firmer-than-expected CNY reference rate setting, but then gave back nearly all of their gains.
The PBoC set the USD/CNY mid-point at 7.1781 vs exp. 7.2758 (prev. 7.1789).
FIXED INCOME
10-year US Treasury futures were uneventful but held on to most of their recent spoils after momentum was initially spurred by a flight to safety and with support also seen following the latest bout of Fed rhetoric, which brought forward money market pricing for the first rate cut by a month to June next year.
Bund futures tested yesterday's best levels, albeit with upside capped by resistance near 129.50.
10-year JGB futures tracked the gains in global counterparts and with the BoJ in the market for JPY 1.4tln of JGBs on top of its fixed-rate operations.
COMMODITIES
Crude futures were rangebound but held on to the majority of the prior day's gains owing to geopolitical risk premium following the attack on Israel and its subsequent siege on Gaza.
The US and Venezuela reportedly made progress in talks that could lead to additional oil sanctions relief, according to Reuters citing sources.
Spot gold traded sideways and plateaued near its highest level in more than a week.
Copper futures failed to sustain early gains amid the subdued risk appetite in China.
Key economic data and events to watch on Tuesday include:
US NFIB Business Optimism Index
US Wholesale Inventories and Sales
NY Fed Survey of Consumer Expectations
Chinese Aggregate Financing and M2 Money Supply
Speeches from ECB President Christine Lagarde and Fed Governors Raphael Bostic, Christopher Waller, Neel Kashkari, and Mary Daly
Supply from the UK, Germany, and US
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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