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Markets Update: APAC Stocks Fall Amid Rising Global; Yields US Senate Nears Deal on Spending Measure; European Equity Futures Point to Softer Open.
Economic Calendar
Global Markets Roundup: 26 Sep 2023
APAC stocks traded mostly lower on Tuesday, with headwinds from the rising global yield environment. US Senate Republican and Democrat negotiators are nearing a deal on a short-term spending measure, according to Bloomberg. This would avert a government shutdown at the end of the month.
European equity futures are indicative of a softer open, with the Euro Stoxx 50 future down 0.2%. This follows a 1.0% decline in the cash market on Monday. FX Markets Quiet, USD/JPY Takes Breather.
The US dollar index (DXY) is lingering around the 106 mark, while the euro (EUR) is trading at 1.05 and the Japanese yen (JPY) is trading at 148.50. USD/JPY has taken a breather after stopping just short of 149.
10-year US Treasury futures remained subdued on Tuesday, as the 10-year yield reached its highest level since October 2007.
The ASX 200 underperformed, with real estate and tech sectors leading the declines. The Nikkei 225 was pressured by accelerating services PPI data and recent currency moves, which kept participants on their toes regarding FX intervention. The Hang Seng and Shanghai Composite indices declined, with sentiment not helped by trade frictions after the US imposed restrictions on additional Chinese and Russian companies related to supplying Russia with components to make drones. However, losses in the mainland were stemmed by another substantial liquidity operation and hopes that the approaching Mid-Autumn Festival and National Day Golden Week holidays would provide a boost to consumption and economic activity. US equity futures were mildly pressured, following the recent choppy performance and upside in yields.
FX The US dollar index (DXY) held on to the prior day's gains and lingered around the 106.00 level, supported by higher US yields and comments from Fed officials, including Kashkari, who sees one more hike this year. Barclays recently noted that its model suggested strong month-end USD buying. The euro (EUR) remained lackluster after falling beneath the 1.0600 handle. The British pound (GBP) was uninspired and retested support at the prior day's lows around the 1.2200 level. The Japanese yen (JPY) took a breather after climbing to just shy of the 149.00 handle, which spurred another round of jawboning from Japan's Finance Minister Suzuki. The antipodeans traded flat in the absence of any relevant data releases. The PBoC set the USD/CNY mid-point at 7.1727, weaker than the expected 7.3174.
FIXED INCOME
10-year US Treasury futures remained subdued as the 10-year yield reached its highest level since October 2007, owing to the ongoing higher-for-longer rate expectations for the Fed.
Bund futures extended on losses below 129.00.
10-year JGB futures tracked the downside in global peers, with prices not helped by an acceleration in services PPI data and mixed results at the 40-year JGB auction.
COMMODITIES
Crude futures marginally declined with WTI crude futures beneath the USD 90/bbl level amid a lack of energy-related catalysts and with headwinds from the negative risk tone and a firmer dollar.
Natural Gas Pipeline Co declared a force majeure for remediation work on the AM#2 mainline.
Spot gold remained constrained alongside the recent strength in the greenback.
Copper futures struggled for direction amid the mostly subdued picture in Asia.
Looking Ahead
US Building Permits & New Home Sales
NBH Policy Announcement
ECB's Lane & Fed's Bowman speeches
Supply from Italy, Germany, UK, and US
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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