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Markets Update: APAC Stocks Mixed as Investors Weigh Fed Decision
Today's important market events:
[USD] PPI (MoM - May) - 14:30 CEST
[USD] Crude Oil Inventories - 16:30 CEST
[USD] Fed Interest Rate Decision/FOMC Statement - 20:00 CEST
[USD] FOMC Press Conference - 20:30 CEST
Global Markets Roundup: 14 June 2023
Asia-Pacific stocks were mixed on Wednesday as investors weighed the potential impact of the Federal Reserve's decision on interest rates. The US central bank is widely expected to keep rates unchanged, but investors are also watching for any clues on the future path of monetary policy.
In Australia, the S&P/ASX 200 rose 0.3% after the latest inflation data all but confirmed the likelihood of an unchanged Fed rate. The data showed that inflation in Australia rose to 3.0% in the year to May, which is above the Reserve Bank of Australia's target of 2-3%. In Japan, the Nikkei 225 was down 0.1%, while the Shanghai Composite Index was up 0.2%.
European equity futures were indicative of a softer open with the Euro Stoxx 50 -0.1% after the cash market closed up 0.7% yesterday. The US dollar index was contained ahead of the FOMC, while the euro lingered below 1.08 and the pound maintained 1.26.
In Australia, the S&P/ASX 200 rose 0.3% after China pledged to support its economy and the People's Bank of China (PBoC) cut rates. The PBoC cut its Standing Lending Facility rate by 10 basis points (bps) and the 7-day Reverse Repo rate by 5 bps.
In Japan, the Nikkei 225 was up 0.1%, while the Shanghai Composite Index was down 0.2%. European equity futures were indicative of a softer open with the Euro Stoxx 50 -0.1% after the cash market closed up 0.7% yesterday.
The US dollar index was rangebound heading into the FOMC policy decision with the central bank widely expected to skip raising rates. The euro traded steadily and looked to retest 1.0800 after yesterday’s brief incursion above the level. Sterling held on to the 1.2600 status and took a breather from recent advances which were facilitated by firm jobs and earnings data. The Japanese yen was rangebound.
Commodities
Crude oil futures were rangebound on Wednesday after yesterday's recovery, which was spurred by Beijing's efforts to bolster the economy. However, further upside was restricted by private sector inventory data which showed mild builds across all products.
The American Petroleum Institute (API) reported that crude oil inventories rose by 1.0 million barrels in the week ended June 10, compared to expectations for a decline of 0.5 million barrels. Gasoline inventories rose by 2.1 million barrels, while distillate inventories rose by 1.4 million barrels.
The Energy Information Administration (EIA) will release its official inventory data on Thursday. The US Department of Energy (DOE) said it is continuing to seek opportunities for more purchases and is to buy roughly 12 million barrels of oil in 2023 to boost reserves.
The total includes barrels already announced for August and September.
Spot gold was contained alongside an uneventful dollar.
Copper futures plateaued overnight but held on to the prior day's gains, which were spurred by the PBoC's short-term funding rate cuts and China's recent policy support pledges.
Looking ahead, highlights include:
US PPI: The US producer price index is due out on Thursday and is expected to show that inflation rose in May.
EZ Industrial Production: Eurozone industrial production is due out on Thursday and is expected to show that output grew in May.
UK GDP Estimate: The UK GDP estimate for the first quarter of 2023 is due out on Thursday and is expected to show that growth slowed in the quarter.
Sweden CPI: Swedish inflation is due out on Thursday and is expected to show that inflation rose in May.
FOMC Policy Announcement & Fed Chair Powell's Press Conference: The Federal Open Market Committee (FOMC) will announce its decision on interest rates on Wednesday and Fed Chair Jerome Powell will hold a press conference.
Supply from Germany: Germany is expected to release data on energy supply on Thursday.
Overall, the mood in markets is likely to remain cautious on Wednesday as investors await the outcome of the FOMC meeting and key economic data.
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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