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Markets Update: APAC Stocks Mixed as Yields Ease, European Futures Signal Slightly Lower Open
Economic Calendar
Global Markets Roundup: 28 Nov 2023
Asia-Pacific stocks traded in a mixed manner on Tuesday, with some markets taking advantage of the lower yield environment, while others remained cautious following the lackluster performance of US counterparts. European equity futures are indicative of a slightly lower open with Euro Stoxx 50 -0.1% after the cash market closed down 0.4% yesterday.
ASX 200 Gains Subdued by Retail Sales Contraction, Nikkei Retreats, Hang Seng and Shanghai Comp Diverge The Australian ASX 200 index was higher on Tuesday, initially benefiting from softer yields and a break above the 7,000 level. However, the index finished off intraday highs following a surprise contraction in Retail Sales data. The Japanese Nikkei 225 index failed to hold on to opening gains and was pressured as a firmer currency paved the way for profit-taking. The Hang Seng and Shanghai Composite indexes diverged despite recent support pledges by the People's Bank of China (PBoC). A report suggested that China's property lifeline could expose banks to large losses and job reductions, weighing on the Shanghai Comp.
FX
The US Dollar Index (DXY) traded flat within a tight range, confined between 103.07 and 103.17. This followed recent pressure from a decline in yields after soft US data releases. Barclays' month-end rebalancing model also indicated a broad-based, strong dollar selling signal. Market participants await this week's key event for the dollar, the Fed's preferred inflation gauge, which is due on Thursday.
EUR/USD steadied and took a breather following yesterday's intraday recovery and return to above the 1.0950 level.
GBP/USD remained afloat after finding near-term support at the 1.2600 level. Overnight comments from BoE Deputy Governor Ramsden suggested that monetary policy needs to be restrictive for a sufficiently long period.
USD/JPY tested 148.00 to the downside, with the Japanese currency outperforming due to narrowing yield differentials.
AUD and NZD were marginally firmer, with AUD/USD extending above the 0.6600 level despite disappointing Retail Sales. NZD/USD printed its highest since August after reclaiming the 0.6100 level.
COMMODITIES Crude oil futures lacked direction, with Brent and WTI crude futures trading both sides of the USD 80/bbl and USD 75/bbl marks, respectively. This comes ahead of Thursday's OPEC+ meeting, where members have yet to reach an agreement as Saudi seeks quota cuts, while others are resisting. Energy Intel noted that there is still no resolution regarding new OPEC+ production baselines and cuts. It added that the meeting is still scheduled to take place virtually on Thursday but understands that a further delay cannot be ruled out. Spot gold traded sideways, with prices stuck around the USD 2015/oz level alongside an uneventful dollar. Copper futures were lackluster amid the mixed risk tone, but downside was stemmed by support at USD 3.75/lb.
Key highlights for the day include:
German GfK Consumer Sentiment
French Consumer Confidence
Italian Producer Prices
Italian Trade Balance
US Consumer Confidence
Richmond Fed Index
Fed Discount Rate Minutes
Speeches from BoE's Ramsden and Haskel
ECB's Lane
Fed's Goolsbee, Waller, Bowman, and Barr
Supply from 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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