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Markets Update: APAC Stocks Mixed as Investors Digest Chinese Data, US Debt Limit Talks Loom
Today's important market events:
[EUR] German ZEW Economic Sentiment (May) - 11:00 CEST
[USD] Retail Sales (MoM - Apr) - 14:30 CEST
[CAD] Core CPI (MoM - Apr) - 14:30 CEST
[EUR] ECB President Lagarde Speaks - 16:00 CEST
Asian stocks were mixed on Tuesday as investors digested weaker-than-expected Chinese activity data and awaited the outcome of debt limit talks between US President Biden and House Speaker Kevin McCarthy. The Shanghai Composite Index fell 0.2%, while the Hang Seng Index rose 0.1%. Japan's Nikkei 225 index was little changed. Investors were also looking ahead to a busy data calendar in Europe and the United States. In Europe, investors will be watching for data on unemployment, GDP, and inflation. In the United States, investors will be watching for data on retail sales, industrial production, and consumer sentiment.
Headlines/Economic Data Australia/New Zealand
Australian stocks open higher, with the ASX 200 up 0.1% at 7,272.
Australian consumer confidence falls, with the ANZ/Roy Morgan Consumer Confidence Index down 1.8% to 79.0.
Australian consumer confidence falls, with the Westpac Consumer Confidence Index down 2.2% to 79.0.
Reserve Bank of Australia (RBA) minutes show that the central bank is determined to bring inflation to target and is considering a 25 basis point rate hike.
New Zealand non-resident bond holdings increase, with the share of non-resident bond holdings rising to 62.1% from 60.3%.
China/Hong Kong
Hong Kong stocks open higher, with the Hang Seng Index up 1.1% at 20,183.
Shanghai Composite Index opens flat at 3,310.
China State Planner (NDRC) official vows to adopt more policies to boost private investment.
China People's Bank of China (PBOC) Q1 Monetary Policy Implementation Report shows that the central bank will continue to implement a prudent monetary policy.
China PBOC sets yuan reference rate at 6.9506, down from 6.9654.
China PBOC Open Market Operation (OMO) sells CNY2.0 billion in 7-day reverse repo.
China Civil Aviation Administration of China (CAAC) reports that China air passenger numbers increased by 537.9% year-on-year in April.
China industrial production growth slows in April, rising 5.6% year-on-year, below expectations of 10.9%.
China retail sales growth slows in April, rising 18.4% year-on-year, below expectations of 21.9%.
China fixed asset investment growth slows in April, rising 4.7% year-on-year, below expectations of 5.7%.
China surveyed jobless rate falls to 5.2% in April, below expectations of 5.3%.
China property investment growth falls in April, rising 6.2% year-on-year, below expectations of 5.7%.
China National Bureau of Statistics (NBS) says that the national economy sustained recovery and momentum in April and reiterates that China is not in deflation, low price levels are 'temporary'.
Japan
Japanese stocks open higher, with the Nikkei 225 up 0.7% at 29,838.
Bank of Japan (BOJ) offers to buy 5-10 year JGBs at a fixed rate of 50 basis points and opens a window to buy an unlimited amount of 10-year JGBs at 0.50%.
South Korea
South Korean stocks open lower, with the Kospi down 0.2% at 2,469.
South Korean stock markets to close on May 29th for a one-off holiday.
Other Asia
Philippine Central Bank (BSP) Governor Benjamin Diokno says that the central bank will be "data-dependent" in its monetary policy decisions and that it is "not out of the woods yet" when it comes to inflation.
North America
US President Joe Biden and House Speaker Kevin McCarthy are scheduled to meet on Tuesday at 3pm ET to discuss the debt ceiling.
House Speaker Kevin McCarthy says that debt ceiling negotiators are still far apart and that he is not confident of getting a deal this week.
Deputy Treasury Secretary Wally Adeyemo says that a US default would be "catastrophic" for the US economy.
Federal Reserve Bank of Minneapolis President Neel Kashkari says that the Fed still has more work to do to bring inflation under control.
Federal Reserve Bank of Atlanta President Raphael Bostic says that inflation is still a "big problem" but that he is hopeful that it will start to come down in the coming months.
Federal Reserve Bank of Richmond President Thomas Barkin says that the Fed will not hesitate to raise rates if inflation persists.
US reportedly planning to purchase 3 million barrels of oil for the emergency reserve.
Europe
Some traders are circulating unverified press chatter saying that the European Central Bank (ECB) is most likely to hike only once or twice more in this cycle.
Crude Oil Futures Edge Higher on US SPR Purchase Plan Crude oil futures edged higher on Tuesday after reports that the United States plans to buy 3 million barrels of oil for the Strategic Petroleum Reserve (SPR). The purchase plan is part of the Biden administration's three-part plan to replenish the SPR, which has been drawn down to its lowest level since 1985. The purchase plan is also seen as a way to help to cool rising oil prices. However, gains in crude oil futures were capped by disappointing Chinese economic data and by concerns about the global economic outlook.
Spot Gold Prices Trade Sideways as Dollar Holds Range Spot gold prices traded sideways on Tuesday as the dollar held a range. Gold is often seen as a safe haven asset, and its price can rise when investors are seeking to reduce risk. However, gold is also sensitive to changes in interest rates, and higher interest rates can make gold less attractive to investors. The dollar index, which measures the value of the dollar against a basket of other currencies, was little changed on Tuesday.
Copper Futures Fall on Weak Chinese Data Copper futures fell on Tuesday after weaker-than-expected Chinese economic data. China is the world's largest consumer of copper, and its economic data can have a significant impact on the price of the metal. The Chinese government said that its economy grew at an annual rate of 4.8% in the first quarter of 2023, down from 4.9% in the fourth quarter of 2022. The slowdown in China's economy is likely to weigh on demand for copper.
In addition, investors will be watching for speeches from central bankers, including ECB President Christine Lagarde and Fed Governor Lael Brainard.
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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