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Markets Update: APAC Stocks Mixed, Euro Stoxx 50 Futures Signal Flat Open, DXY Sub-104 Pre-FOMC.
Economic Calendar
Global Markets Roundup: 13 Dec 2023
Asia-Pacific stocks traded mixed on Wednesday, with investors cautious ahead of the much-anticipated Federal Open Market Committee (FOMC) announcement. European equity futures are indicative of a flat open, with the Euro Stoxx 50 futures index unchanged after the cash market closed down 0.1% yesterday. The US Dollar Index (DXY) remained below 104 as traders awaited the FOMC decision. The Japanese Yen (JPY) showed little reaction to improved Tankan Manufacturing Index data, while the New Zealand Dollar (NZD) lagged behind its peers. US Treasury yields edged higher after a strong auction of 30-year bonds, while crude oil futures languished near six-month lows.
The ASX 200 surged, led by strength in healthcare stocks, as Sigma shares surged by over 70% shortly after the return from a trading halt and the recent announcement of a merger with Chemist Warehouse. The Nikkei 225 was lifted by an encouraging Tankan survey, which mostly beat expectations. The survey showed sentiment amongst Japan's large manufacturers and non-manufacturers was at the highest since March 2020 and November 1991, respectively. The Hang Seng and Shanghai Composite were pressured, despite the detailing of China's policy focus for next year and support pledges. The statement from the Central Economic Work Conference refrained from any major stimulus announcements.
FX
The US Dollar Index (DXY) edged higher, but remained below the 104.00 level, as investors awaited the FOMC announcement. The EUR eased back from resistance at 1.0800, while the British pound remained stuck near 1.2550. The Japanese yen traded on both sides of 145.50, with little reaction seen from the improved Tankan data. The Australian and New Zealand dollars were lackluster, with the New Zealand dollar underperforming following a wider-than-expected Current Account deficit. The People's Bank of China set the USD/CNY mid-point at 7.1126, compared to the expected 7.1717 and the previous 7.1163.
FIXED INCOME
10-year UST futures were marginally higher, rebounding from yesterday's post-CPI selling. The recovery was helped by a strong 30-year auction which was sold at 4.344% and saw a stop-through of 0.3bps for the first stop-through since June. Bund futures edged mild gains, finding some support around the 135.00 level. 10-year JGB futures followed suit to the gains in global counterparts with the Bank of Japan in the market for over JPY 1.1 trillion of JGBs.
COMMODITIES
Crude oil futures languished near 6-month lows with WTI beneath USD 69/bbl after slumping yesterday. The lack of an obvious catalyst and a cut in the EIA STEO world oil demand growth forecasts provided little to spur prices. US Energy Inventory Data showed crude inventories fell by 2.3 million barrels (exp. -0.7 million barrels), gasoline inventories rose by 5.8 million barrels (exp. +1.9 million barrels), distillate inventories rose by 0.3 million barrels (exp. +0.6 million barrels), and Cushing inventories rose by 1.4 million barrels. The EIA STEO stated 2023 world oil demand growth forecast was cut by 30,000 barrels per day (bpd) to a 1.85 million bpd Y/Y increase, while the 2024 forecast was cut by 60,000 bpd to a 1.34 million bpd Y/Y increase. Spot gold traded sideways with participants tentative ahead of the incoming wave of central bank updates. Copper futures were lacklustre owing to the widespread cautiousness and China stimulus disappointment. Chilean copper miner Antofagasta and workers at the Centinela mine extended talks to allow workers to vote on a new contract offer.
Key highlights on the economic calendar include UK GDP, Services, and Manufacturing Output, EZ Industrial Production, US MBA new home sales, PPI, NZ GDP, Fed & BCB policy announcements, Fed Chair Powell's press conference, and supply data from Italy and 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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