_edited_edited.png)
Markets Update: APAC stocks mostly in the red as sentiment sours on higher yields - It’s Sept again and Asia FX intervention back in focus; China property developers rebound amid ongoing support speculation
Economic Calendar
Global Markets Roundup: 06 Sep 2023
Asian stocks traded mostly in the red on Wednesday, following the subdued handover from Wall Street where sentiment was clouded by the higher yield environment. The Nikkei 225 was down 0.7%, the Hang Seng was down 0.4%, and the Shanghai Composite was down 0.2%.
ASX 200 falls as tech drags down most sectors
The Australian stock market fell on Wednesday, dragged down by weakness in the technology sector. The ASX 200 closed down 0.7%, with all sectors except energy in the red.
The energy sector was the only gainer, thanks to higher oil prices. The rest of the market was weighed down by weakness in technology stocks, which fell 1.5%. Other weak sectors included financials, materials, and industrials.
The sell-off in the ASX 200 came despite better-than-expected GDP data for Australia. The economy grew by 0.8% in the second quarter, beating expectations for 0.6% growth.
However, the positive GDP data was not enough to offset concerns about rising interest rates and inflation. The Reserve Bank of Australia is expected to raise interest rates later this year, which could weigh on economic growth.
FX markets: US dollar strengthens as yields rise
The US dollar strengthened on Wednesday, holding on to the prior day's gains after strengthening on return from the Labor Day weekend amid a higher yield environment and after the rise in oil prices contributed to the hawkish impulse.
The euro languished firmly below 1.0800 after its recent slump and disappointing PMI data. The pound was contained with a slight reprieve after having retreated beneath the 1.2600 handle. The US dollar also rose against the Japanese yen, but eased slightly from a YTD high after the latest bout of JPY depreciation spurred renewed jawboning from Japanese officials.
The Australian dollar and New Zealand dollar were choppy, with early pressure from the mostly risk-averse mood and a weaker yuan. However, stronger-than-expected GDP from Australia had little effect as the data showed a slowdown in growth and a negative deflator.
Fixed income markets: Treasuries see mild reprieve from selling pressure
10-year Treasury futures saw mild reprieve from recent selling pressure, albeit with the recovery limited amid this week's slew of corporate issuances and with headwinds from the recent gains in oil prices. Bund futures were stuck near yesterday's worst levels ahead of today's German 10-year auction.
10-year Japanese government bond (JGB) futures clawed back opening losses, although the upside was capped after mixed comments from Bank of Japan (BoJ) Board Member Takata. Takata was somewhat hawkish on inflation, but believes the BoJ must patiently maintain easy policy given a very high uncertainty on the outlook.
Commodities: Crude oil prices take a breather after recent gains
Crude oil prices traded sideways and took a breather after yesterday's advances which lifted Brent crude above USD 90/bbl for the first time this year owing to Saudi Arabia and Russia's extension of output cuts to year-end.
The US Energy Information Administration (EIA) said the US added 2.9 million barrels of oil to the Strategic Petroleum Reserve (SPR) in August, which was the largest monthly increase in the stockpile in more than three years.
The US Congress is set to sell off a 1 million barrel emergency reserve of gasoline which was created in the aftermath of Hurricane Sandy amid questions about the reserve's usefulness.
Spot gold languished at yesterday's lows as the greenback held on to its recent gains. Copper futures traded lower amid the mostly negative risk sentiment in Asian bourses.
Looking ahead, the focus will be on the release of a number of economic data releases, including German Industrial Orders, EZ, German, French, Italian, UK Construction PMI, US ISM Services, NBP & BoC Policy Announcements, Fed’s Collins & Logan, BoE's Bailey, Cunliffe & Dhingra, Riksbank’s Thedeen, Supply from UK & Germany.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team