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Markets Update: Asia-Pacific Stocks Display Resilience Despite Iranian Threats
Economic Calendar
Global Markets Roundup: 17 Oct 2023
**Market Overview - Tuesday, October 17, 2023:**
APAC stocks showed predominantly positive momentum, mirroring gains observed in global markets. However, the upside was constrained as geopolitical concerns emanated from Iran, introducing an element of caution.
Iran's Foreign Minister signaled the potential for pre-emptive actions by the resistance front in the coming hours, as communicated in remarks made the previous night.
**Upcoming Diplomatic Visit Impacting Market Sentiment:**
US President Biden is scheduled to travel to Israel on Wednesday, with intentions to reaffirm the United States' solidarity with Israel. This impending diplomatic visit adds a layer of anticipation to the market dynamics.
**European Equities Navigate Cautious Open:**
European equity futures point to a restrained opening, with the Euro Stoxx 50 future indicating a marginal decline of 0.1%. This follows a 0.3% gain in the cash market during the previous trading session.
**Currency Markets Display Consolidation:**
In currency markets, the Dollar Index (DXY) remains contained, holding within the 106 handle. EUR/USD and USD/JPY exhibit consolidation patterns around 1.0550 and 149.50, respectively. The Australian Dollar (AUD) leads in performance, while the New Zealand Dollar (NZD) lags.
**Market Insights - Today's Session Overview:**
**ASX 200 Demonstrates Sector-Led Performance:**
The ASX 200 exhibited strength driven by notable outperformance in the technology and telecommunications sectors. Mining companies also saw positive momentum, propelled by Rio Tinto's quarterly update. Despite a decline in overall output, Rio Tinto reported increased iron ore shipments, contributing to the sector's favorable performance.
**Nikkei 225 Experiences Volatility Around Key Level:**
The Nikkei 225 began the session on a positive note, surpassing the crucial 32,000 level. However, subsequent intraday movements saw a retreat from the initial highs. The index is currently oscillating around the significant 32,000 level, indicating a level of indecision in the market.
**Hang Seng and Shanghai Comp. in Positive Territory:**
Both the Hang Seng and Shanghai Composite indices registered positive movements. However, the mainland market experienced a lag due to concerns surrounding developer debt. Country Garden faces the imminent risk of default, with the grace period for a USD 15 million coupon payment set to expire today. Additionally, an Evergrande unit seeks creditor approval to extend yuan-denominated bonds, adding to the complexities in the Chinese real estate sector.
**Foreign Exchange (FX):**
- The Dollar Index (DXY) maintained a rangebound trajectory within the 106 handle as market participants awaited crucial US Industrial Production and Retail Sales data, anticipating insights before key Federal Reserve speeches.
- EUR/USD experienced a minimal retreat from the previous day's peak, with the pullback limited despite hawkish comments from the European Central Bank (ECB).
- GBP/USD hovered around the 1.2200 level, relinquishing slight gains, as attention shifted to upcoming UK wage data.
- USD/JPY exhibited indecision, lacking fresh catalysts, and remained confined around the focal point of 149.50.
- Antipodeans displayed mixed performance. AUD/USD received a marginal boost after the Reserve Bank of Australia's (RBA) minutes, featuring hawkish rhetoric on inflation. In contrast, NZD/USD remained contained following softer-than-expected CPI data.
- The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.1796, surpassing expectations of 7.3038 (previous 7.1798).
**Fixed Income:**
- 10-year US Treasury (UST) futures marginally extended losses from the prior day, with yields edging higher amid an improved risk appetite and in anticipation of a busy schedule of Federal Reserve speakers.
- Bund futures continued to face pressure after recent selling and hawkish comments from ECB's Lane.
- 10-year Japanese Government Bond (JGB) futures mirrored global trends, remaining subdued, exacerbated by weaker demand observed at the 20-year auction.
**Commodities:**
- Crude oil futures exhibited subdued performance, following the prior day's choppy movements amid ongoing geopolitical risks. The market also considered the potential unwinding of US sanctions on Venezuela.
- Chevron (CVX) Australia spokesperson noted ongoing work on proposed enterprise agreements for Gorgon and Wheatstone facilities, based on clarifications from the Fair Work Commission.
- The US State Department welcomed announcements by Maduro representatives and the unitary platform to resume negotiations, expressing commitment to international efforts supporting Venezuelan-led negotiation processes.
- Spot gold maintained a rangebound stance, tracking an uneventful greenback ahead of pivotal data releases and Federal Reserve speeches.
- Copper futures, initially contained, faced selling pressure ahead of the European open, reflecting uncertainties in the market.
**Key Events on the Horizon:**
Looking ahead, notable events include UK Wages, German ZEW sentiment data, and a series of releases from the United States, encompassing Retail Sales, Industrial Production, Business Inventories, and speeches from prominent Federal Reserve officials, including Williams, Bowman, Barkin, and Kashkari. Additionally, ECB's de Guindos will share insights. The day also features the release of the Fed Discount Rate Minutes and supply-related updates from the UK and Germany.
**Earnings Reports from Major Corporations:**
On the corporate front, investors are keenly anticipating earnings reports from Ericsson, Johnson & Johnson (JNJ), Prologis, Goldman Sachs, Bank of America, and Lockheed Martin. These results are expected to provide insights into the financial health and performance of key players in various sectors.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team