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Markets Update: Asia-Pacific Stocks Mixed on Disappointing Chinese PMIs, BOJ Widens Yield Band; ASX 200 Flat, Nikkei 225 Supported by BOJ, Hang Seng and Shanghai Comp Pressured by PMI Data.
Economic Calendar
Global Markets Roundup: 31 Oct 2023
Asian-Pacific stocks traded mixed on Tuesday, with some markets under pressure from disappointing Chinese official PMIs. The BoJ maintained NIRP and the 10-year JGB yield target at 0%, but widened the reference range to 100 basis points up or down from target. European equity futures are indicative of a slightly softer open, with the Euro Stoxx 50 down 0.2% after cash markets closed higher by 0.4% yesterday. The US Dollar is firmer and just below the 106.50 mark, while the Japanese Yen is lagging post-BoJ and EUR/USD has pulled back beneath 1.06.
The ASX 200 finished flat on Tuesday, as strength in the real estate, financials, and consumer sectors was offset by underperformance in mining stocks and after the weak factory activity data from Australia's largest trading partner, China. The Nikkei 225 was initially choppy after Industrial Production and Retail Sales missed estimates, but the index was later supported following the BOJ policy announcement in which the central bank announced a less aggressive than anticipated tweak to YCC. The Hang Seng and Shanghai Comp were pressured following disappointing PMI data which showed China's factory activity returned into contractionary territory for October. There were also plenty of earnings releases, including from the likes of Bank of China, BYD, and PetroChina.
FX
The US Dollar strengthened on Tuesday, partially recouping the losses it suffered on Monday when geopolitical risk premiums unwound. However, further upside was capped ahead of upcoming risk events.
EUR/USD eased from its previous day's high and retreated below 1.0600 after ECB officials reiterated that they see no need for further rate hikes.
GBP/USD pulled back amid the cautious mood and after a softening in the UK Shop Price Index.
USD/JPY clawed back the previous day's losses and reclaimed the 150.00 level after the BOJ announced a modest tweak to its yield curve control policy.
The AUD and NZD were pressured by headwinds from disappointing Chinese PMI data and the cautious mood.
Fixed Income
10-year US Treasury futures traded indecisively after the recent haven unwind and corporate issuances.
German Bund futures remained afloat after Monday's bout of Eurozone data releases and ECB rhetoric.
10-year Japanese Government Bond (JGB) futures were pressured ahead of the BOJ announcement owing to a hawkish source report which noted a potential tweak to YCC and underpinned the 10-year JGB yield to near the 1.0% cap. After the central bank opted for a modest tweak and switched to an even more flexible approach on yield curve control, 10-year JGB futures were choppy and momentarily pared all their losses.
Commodities
Crude oil futures traded rangebound after the previous day's geopolitical risk unwind, with prices contained overnight by the overall cautious risk sentiment and the disappointing Chinese official PMI data.
Spot gold was lacklustre following its recent failure to sustain the USD 2,000/oz level.
Copper futures were subdued, with prices not helped by the contraction in China's factory activity.
Looking ahead to the rest of the week, key highlights include German GDP Flash, French Flash CPI, EZ Flash CPI & Flash-Prelim. GDP, US Employment Costs & Consumer Confidence, Speech from ECB’s de Guindos, and Supply from Italy. Earnings from AB InBev, BASF, Stellantis, BP, Marathon, Caterpillar, Pfizer, SYSCO, and AMD are also due.
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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