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Markets Update: CN equities much higher on Politburo’s overnight commitment to action; Focus on US earnings + FOMC, ECB, BOJ rate decisions.
Economic Calendar
Global Markets Roundup: 25 July 2023
Asian stocks traded mostly higher on Tuesday, with Chinese stocks rallying after the Politburo pledged to support the economy. The Shanghai Composite Index rose 1.3%, while the Hang Seng Index rose 0.7%.
European Equity Futures Softer
European equity futures were indicative of a marginally softer open, with the Euro Stoxx 50 down 0.1% after the cash market closed down by 0.2% yesterday. Investors are awaiting more data on the global economy, including German Ifo and US Consumer Confidence.
DXY Softer but Holds on to 101 Handle
The dollar index (DXY) was a touch softer but remained on a 101 handle. The euro (EUR/USD) was stuck below 1.11, while the Australian dollar (AUD) marginally outperformed.
Crude Futures Hold on to Recent Gains Crude futures held on to most of their recent spoils after climbing to 3-month highs amid China's stimulus hopes. Brent crude futures were up 0.2% at $106.50 a barrel, while WTI crude futures were up 0.1% at $103.25 a barrel.
Aussie Stocks Led by Gains in Mining and Energy Sectors
The ASX 200 was positive, led by gains in the mining and energy sectors. The index was supported by recent strength in underlying commodity prices, which have been boosted by the Chinese stimulus hopes.
Nikkei 225 Lagged as Speculation Remained Rife Regarding This Week's BoJ Meeting
The Nikkei 225 lagged the broader market, as speculation remained rife regarding this week's Bank of Japan (BoJ) meeting. There have been reports that the BoJ is considering a large increase in its 2023 inflation outlook, which could weigh on the yen.
Hang Seng and Shanghai Comp Boosted by Property and Tech Stocks
The Hang Seng and Shanghai Composite were boosted by gains in property and tech stocks. The Hang Seng Tech Index rose by around 5%, while the Hang Seng Mainland Properties Index rose by a double-digit percentage. The gains were driven by the Politburo's support pledges, which omitted the language that homes are not for speculation.
US Equity Futures Rangebound
US equity futures were rangebound, as investors awaited the incoming big tech earnings. The earnings season is set to kick off later today, with Apple and Microsoft reporting their results.
FX
The dollar index (DXY) marginally softened, although it held onto the majority of the prior day's gains. The euro (EUR/USD) saw a slight reprieve from recent underperformance, but remained beneath the 1.1100 handle. The British pound (GBP/USD) partially nursed its data-induced losses, after finding support around the 1.2800 level. The US dollar (USD/JPY) was rangebound, with mild headwinds from reports of a potential upgrade to BoJ inflation forecasts.
Fixed Income
10-year US Treasury futures were lacklustre, after yesterday's bear flattening ahead of supply and in the wake of PMI data. Bund futures slightly softened, after fading some of the initial knee-jerk reaction to the dismal German PMI data. 10-year Japanese government bond (JGB) futures traded rangebound, amid the ongoing speculative noise regarding this week's BoJ meeting and following mixed results at the 40-year auction.
Commodities
Crude futures held on to most of their recent spoils after climbing to 3-month highs amid China's stimulus hopes. Russian Deputy PM Novak supported proposals to limit the number of oil product exporters. Russian Finance Ministry plans to cut the discount it uses to set taxes on the country's crude oil exports to USD 20/bbl from USD 25/bbl currently. Kazakh Energy Minister said there are no issues with shipping Kazakh crude via Russia amid Black Sea tensions. Spot Gold rebounded off the prior day's lows, as the greenback gave back some of its recent gains. China's H1 gold output rose 2.2% Y/Y to 178.6 metric tons and gold consumption rose 16.4% Y/Y to 554.9 metric tons, according to Reuters citing state media. Copper futures benefitted from the mostly positive risk and outperformance in Chinese markets.
Looking Ahead Highlights for the day include German Ifo, US Consumer Confidence, Supply from UK, Italy & US, Earnings from EssilorLuxottica, Kering, LVMH, UniCredit, Unilever, Microsoft, Alphabet, Visa, Moody's & GE.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team