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Markets Update: APAC Stocks Edge Higher, European Futures Signal Firmer Open, DXY Lingers Near 104.
Economic Calendar
Global Markets Roundup: 06 Dec 2023
Asia-Pacific stocks advanced on Wednesday, buoyed by softer yields and improved risk sentiment. European equity futures are indicative of a modestly firmer open, with the Euro Stoxx 50 index futures up 0.4%. This follows a 0.9% gain in the cash market yesterday.
The ASX 200 index saw broad gains across sectors, unfazed by mixed GDP data. The Nikkei 225 index climbed back above the 33,000 level, boosted by a decline in the 10-year Japanese government bond (JGB) yield to its lowest since August. The Hang Seng index in Hong Kong followed the overall upbeat mood, while the Shanghai Composite index lagged behind. The divergence reflected the continued liquidity drain by the People's Bank of China (PBoC) and Moody's revision of China's credit outlook to negative.
FX
The US Dollar Index (DXY) stalled near the 104.00 level but held onto most of the prior day's gains, following mixed data releases that featured strong ISM Services data offsetting the lowest job openings in more than two years. Investors await further employment data.
EUR/USD languished beneath 1.0800, with the single currency struggling amid recent dovish ECB rhetoric.
GBP/USD traded rangebound and partially nursed some losses, just about reclaiming the 1.2600 level.
USD/JPY kept afloat alongside softer Japanese yields and with BoJ Deputy Governor Himino reiterating the central bank's commitment to easy monetary policy until inflation stabilizes.
AUD and NZD clawed back some of this week's losses, with the rebound facilitated by the positive risk appetite and after AUD/USD found a floor around 0.6550. Chinese major state-owned banks were seen selling dollars in the market again for a second day.
The People's Bank of China (PBoC) set the USD/CNY mid-point at 7.1140 vs exp. 7.1476 (prev. 7.1127).
FIXED INCOME
10-year UST futures marginally pulled back after stalling near the 111.00 level, following recent bull-flattening that was spurred by dovish central bank updates and softening US labor market data.
Bund futures took a breather after recently extending above 134.00 and printing their best levels in 6 months.
10-year JGB futures tracked the advances in global counterparts to above the 147.00 level, but further upside was capped by a quiet calendar and the absence of additional Bank of Japan (BoJ) purchases.
COMMODITIES Crude oil futures lacked direction after yesterday's whipsawing and amid headwinds from recent dollar strength. A slight surprise build in the private sector headline crude inventories also kept a tight rein on price action. US Energy Information Administration (EIA) data showed a crude oil inventory build of 0.6 million barrels, against expectations for a draw of 1.4 million barrels. Gasoline inventories rose 2.8 million barrels, exceeding expectations of a 1.0 million barrel increase, while distillate inventories added 0.9 million barrels, compared to expectations for a gain of 1.5 million barrels. Saudi Arabia set its January Arab light crude official selling price (OSP) to Asia at Oman/Dubai + USD 3.50/bbl, to Northwest Europe at ICE Brent + USD 2.90/bbl, and to the US at ASCI + USD 7.15/bbl. Venezuelan President Maduro said he would authorize oil exploration in an area around the Esequibo River, a disputed territory with Guyana. US official Nichols also noted that they are seeing Venezuela's illicit oil trade move back into the formal sector. Spot gold traded sideways, with the precious metal contained to a tight range around USD 2,020/oz. Copper futures marginally gained, with prices helped by the mostly constructive mood during Asian trade. Key highlights to watch for today include:
EZ, German, French, Italian, and UK Construction PMI
German Industrial Orders
EZ Retail Sales
US MBAs
ADP National Employment
International Trade
Canadian Trade
NBP and BoC policy announcements
BoE's FSR
Supply from the UK
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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