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Markets Update: Asia Catches Wall Street's Sunshine, Digests Mixed Bag of Regional News.
Economic Calendar
Global Markets Roundup: 23 Jan 2024
Asian stocks basked in Wall Street's record-breaking glow on Tuesday, with most markets extending gains despite a mixed bag of regional news. The BoJ's policy hold and rumors of a potential Chinese equity rescue package added an intriguing layer to the trading session. China Considers Market Rescue: According to Bloomberg sources, the world's second-largest economy is mulling a $278 billion package to shore up its ailing stock market. This news offered a tentative boost to sentiment across the region. BoJ Stands Pat: The Bank of Japan, as widely expected, maintained its current monetary policy settings and forward guidance. While some traders may have sought further stimulus, the decision's predictability helped temper volatility. Europe Eyes Contained Open: European equity futures hint at a muted start to the session, with the Euro Stoxx 50 edging up slightly after Monday's 0.7% gain.
ASX 200 Surges on Broad Strength: Australia's benchmark S&P/ASX 200 index led the rally, boosted by a broad-based advance across financials, tech, and defensive sectors. The index shrugged off mixed business surveys to climb 0.71% and close at 7,529.50. Nikkei 225 Fades After Initial BoJ-Fueled Rally: Japan's Nikkei 225 initially extended gains after the Bank of Japan reaffirmed its ultra-loose monetary policy. The index briefly surpassed the 37,000 level but encountered resistance and ultimately relinquished all its early gains, closing flat at 36,920.27. Hong Kong Buoyed by Rescue Rumors, Mainland Sinks: Hong Kong's Hang Seng index outperformed, buoyed by reports that China might unveil an equity market rescue package this week. Tech names received additional support after China's gaming regulator pulled draft rules for controlling video game spending. However, the Hang Seng's gains were capped at 2.78%, closing at 15,377.34. Shanghai Lags Despite Potential Market Rescue: The mainland's Shanghai Composite Index lagged behind its regional peers. While the initial wave of optimism from the potential rescue package faded, speculation about the support measures' details kept investors cautious. Additionally, the lack of clarity regarding further stimulus for the ailing property sector weighed on sentiment. The Shanghai Composite ended the day down 0.08%, closing at 2,754.08.
Foreign Exchange:
DXY Retreats on Hold:Â The US Dollar Index (DXY) gradually softened amidst subdued trading as market participants awaited key risk events later in the week.
Euro Eyes Reclaiming 1.0900:Â EUR/USD rebounded from the previous day's lows and set its sights on reclaiming the psychologically important 1.0900 level.
Sterling Pushes Higher: GBP/USD steadily climbed above the 1.2700 near-term support, indicating potential for further gains.
JPY Wobbles After BoJ: USD/JPY remained choppy after the Bank of Japan's policy decision delivered no surprises, trading on both sides of the 148.00 mark.
AUD and NZD on China Rumors: Antipodeans, including AUD/USD and NZD/USD, received a boost from reports of a potential Chinese equity market rescue package.
PBoC Guides the Yuan: The People's Bank of China set the USD/CNY midpoint at 7.1117, a slight depreciation from the previous day.
Commodities:
Crude Takes a Pause: Crude oil futures took a breather after the previous day's advances, with ongoing geopolitical risks providing continued support.
Gold Inches Higher:Â Spot gold managed modest gains above USD 2,020/oz as the US Dollar's earlier strength faded.
Copper Boosted by China Hopes:Â Copper futures shrugged off initial losses and found support from hopes of Chinese economic stimulus measures.
Fixed Income:
US Treasuries Steady: 10-year US Treasury futures remained uneventful after the previous day's strong gains, fueled by buying recommendations for 5-year notes following last week's sharp decline.
Bund Futures Lack Direction: German Bund futures traded sideways after recent price swings around the 134.50 level, with upcoming German bond supply likely to influence further direction.
JGBs Uninspired by BoJ: 10-year Japanese Government Bond (JGB) futures edged indecisively before and after the Bank of Japan's policy decision, highlighting continued market uncertainty.
Data and Earnings on Tap: A packed data calendar awaits later in the day, featuring UK public sector net borrowing, Canadian new housing prices, Eurozone consumer confidence, and the US Richmond Fed manufacturing index. New Zealand's CPI, Australian PMI, and Japanese trade data are also in focus. Earnings season continues with reports from Ericsson, Logitech, Johnson & Johnson, Procter & Gamble, and Netflix.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team