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Markets Update: APAC Stocks Mostly Lower as Risk Sentiment Wanes
Today's important market events:
[EUR] German Services PMI (Jun) - 09:55 CEST
[GBP] UK Composite PMI (Jun) - 10:30 CEST
[GBP] UK Services PMI (Jun) - 10:30 CEST
[USD] FOMC Meeting Minutes - 20:00 CEST
Global Markets Roundup: 05 Jul 2023
Asian stocks were mostly lower, following the holiday lull stateside and as participants digested the latest Chinese Caixin Services PMI data. The Caixin Services PMI came in at 51.7 in June, below expectations of 52.0 and down from 52.1 in May.
The weak data weighed on sentiment, as investors worried about the impact of the ongoing COVID-19 lockdowns in China on the global economy.
The dollar index (DXY) eked mild gains and retained the 103.00 level, with price action rangebound after the Independence Day celebrations in the US. The euro (EUR) was slightly lower against the dollar, while the pound (GBP) was also down. Crude futures faded some of the prior day's gains amid the mostly risk-averse mood in Asia.
China's Xi Warns Putin Against Using Nuclear Weapons Chinese President Xi Jinping personally warned Russian President Vladimir Putin against using nuclear weapons in Ukraine, according to a report by the Financial Times. The report, which cited Western and Chinese officials, said that Xi made the warning during a phone call with Putin on Wednesday.
The Australian stock market (ASX 200) was marginally lower, amid underperformance in the largest-weighted financials sector and after mostly softer data releases from Australia. The Nikkei 225 in Japan slumped at the open but recouped some of the losses after it held above the 33,000 level.
The Hang Seng and Shanghai Composite indices in China were subdued by ongoing trade-related frictions with warnings of more retaliatory measures against Western tech export controls. The latest Chinese Caixin Services PMI missed forecasts and printed its slowest pace of increase since January.
US equity futures were uneventful ahead of the return of US participants and incoming FOMC Minutes. European equity futures were indicative of a slightly lower open with the Euro Stoxx 50 -0.2% after the cash market closed down by 0.2% yesterday.
Currency Markets
The dollar index (DXY) eked mild gains and retained the 103.00 level, with price action rangebound after the Independence Day celebrations in the US and heading into the FOMC Minutes release.
The euro (EUR) remained subdued and extended on yesterday's lows after recently slipping beneath 1.0900. The pound (GBP) reverted to the 1.2700 focal point after gradually fading most of the prior day's early advances.
The US dollar (USD) against the Japanese yen (JPY) was kept afloat but with gains capped amid the mostly negative mood in Asia and as Japan’s currency continues to linger near speculated intervention-triggering levels.
The Australian dollar (AUD) was mixed with AUD/USD marginally softer in the aftermath of the Chinese PMI data.
Fixed Income Markets
10-year US Treasury futures were indecisive and oscillated around the 112.00 level following the absence of cash market trade in the US and with participants set to digest the FOMC Minutes on the day of their return from the holiday closure.
Bund futures remained afloat following yesterday’s intraday recovery from beneath the 133.00 level.
10-year Japanese government bond (JGB) futures lacked direction but with the downside cushioned amid the Bank of Japan’s (BoJ) presence in the market for over JPY 1.2 trillion of JGBs under its scheduled purchases.
Commodities Markets
Crude oil futures faded some of the prior day's gains amid the mostly risk-averse mood in Asia, while focus turns to the OPEC International Seminar and speeches from key officials including the Saudi Energy Minister.
Saudi Foreign Ministry said Saudi Arabia and Kuwait have full sovereign rights to exploit natural wealth in the divided region and called for Iran to start negotiations with them to demarcate the eastern border of the divided area.
Spot gold remained flat following the Thanksgiving holiday and as the FOMC Minutes loom.
Copper futures were mildly pressured after softer-than-expected Chinese Caixin Services PMI which printed its weakest since January and added to the slow Chinese economic recovery narrative.
Looking Ahead
Highlights for the day include EZ/UK Services Final PMI, US Durable Goods & Factory Orders, FOMC Minutes, OPEC International Seminar, Speeches from Saudi and UAE Energy Ministers, and Supply from UK & Germany.
Overall, risk sentiment was subdued in Asia on Thursday, as investors digested the latest economic data and weighed the implications of the ongoing Russia-Ukraine war.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team