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Markets Update: US CPI in focus
Today's important market events:
[USD] US CPI (MoM/YoY - May) - 14:30 CEST
[GBP] BoE Gov Bailey Speaks - 16:00 CEST
Global Markets Roundup: 13 June 2023
Asian markets traded mostly higher on Tuesday following the gains on Wall Street on Monday, where the S&P 500 and Nasdaq 100 notched fresh YTD highs.
The Nikkei 225 resumed its outperformance and breached the 33,000 level for the first time in over three decades. European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed up 0.6% yesterday.
The US dollar index is a touch softer in quiet trade, while the euro is capped by resistance ahead of 1.08. The pound is awaiting the UK jobs metrics, which are due out later today.
Mixed economic data: Australia released mixed economic data on Tuesday, with Westpac Consumer Confidence improving but remaining near recession lows and NAB Business Confidence deteriorating.
PBoC rate cut: The People's Bank of China (PBoC) cut its short-term interbank funding rate on Tuesday, which raises the prospects of a cut to the MLF rate and benchmark LPR.
US-China tensions: The US added 43 entities to its export control list on Tuesday, which could further escalate tensions between the two countries.
Upcoming risk events: A number of key risk events are due out this week, including US inflation data and the FOMC meeting.
Overall, the mood in markets was cautious on Tuesday, with investors reluctant to make any big moves ahead of the release of key data and the outcome of the FOMC meeting. Here is a more detailed look at how each market performed on Tuesday:
Australia: The ASX 200 just about kept afloat but with upside capped after mixed data in which Westpac Consumer Confidence improved but remained near recession lows and NAB Business Confidence deteriorated.
Japan: The Nikkei 225 resumed its outperformance and breached the 33,000 level for the first time in over three decades amid strength in automakers and with SoftBank spearheading the advances on news that Intel is to discuss being an anchor investor in the Arm IPO.
China: The Hang Seng and Shanghai Composite were both initially subdued despite the PBoC’s cut to its short-term interbank funding rate, with sentiment dampened by ongoing growth concerns and lingering frictions after the US added 43 entities to its export control list.
US: US equity futures marginally extended on the prior day's highs with the Emini S&P eyeing the 4,400 level. European equity futures are indicative of a higher open with the Euro Stoxx 50 +0.7% after the cash market closed up 0.6% yesterday.
In the currency markets, the US dollar index slightly softened in rangebound trade ahead of the looming risk events beginning the CPI data on Tuesday on which, Citi has noted that markets are mispricing downside risks for inflation. The euro was firmer but with gains capped after recent choppy price action and amid resistance ahead of the 1.0800 handle.
The pound nursed some of its recent losses, while participants await UK jobs and average earnings data. The Japanese yen was indecisive after yesterday's tentative mood with recent price action largely at the whim of yields. In the fixed income markets, 10yr UST futures remained afloat after yesterday’s bull-steepening which was facilitated by the recent tumble in oil prices and positioning into the upcoming CPI data and FOMC meeting.
Bund futures continued to edge higher after rebounding off support around the 134.00 level. 10yr JGB futures tracked the gains in global counterparts and with stable demand seen at the enhanced auction for super-long JGBs.
In the commodity markets, crude futures received some respite overnight although the recovery was insignificant compared to yesterday's 4% drop.
Spot gold was rangebound overnight with participants tentative ahead of the looming key risk events.
Copper futures were gradually supported after the PBoC cut short-term borrowing costs for the first time since August.
Looking ahead, highlights include:
US CPI: The US CPI report is due out later today and is expected to show that inflation rose in May.
UK Jobs Report: The UK jobs report is also due out later today and is expected to show that the unemployment rate fell in May.
EU & German ZEW: The EU and German ZEW economic sentiment surveys are due out later today.
Speeches from BoE's Bailey, Dhingra & ECB's Enria: The Bank of England's Governor Andrew Bailey, the Bank of England's Chief Economist Huw Pill, and the European Central Bank's Supervisory Board Chairman Andrea Enria are all due to speak later today.
Supply from Italy, UK, Germany & US: Supply data from Italy, the UK, Germany, and the US is due out later today.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team