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Markets Update: APAC Stocks Rise on Softer US CPI; ASX 200 Lifted by Real Estate and Tech, Nikkei Extends Gains, Hang Seng and Shanghai Comp Underpinned; European Futures Point Higher.
Economic Calendar
Global Markets Roundup: 15 Nov 2023
Asia-Pacific stocks followed suit to the global risk-on mood on Wednesday, after softer-than-expected US CPI data eased concerns about aggressive monetary tightening by the Federal Reserve. The region also digested better-than-expected Chinese activity data, which provided a further boost to sentiment. In the US, the House of Representatives voted 336-95 to pass a temporary spending bill that would avert a government shutdown. The bill now goes to the Senate for consideration. European equity futures are indicative of a slightly firmer open, with the Euro Stoxx 50 up 0.2% after the cash market closed +0.8% yesterday. The US Dollar Index (DXY) is stuck just above the 104 mark, while USD/JPY is sub-151. Other major currencies are holding onto gains against the greenback.
The ASX 200 index was led higher by notable outperformance in real estate and tech stocks, following a decline in yields and with the index unfazed by the acceleration in the quarterly Wage Price Index. The Nikkei 225 index extended its gains after it gapped above the 33,000 level alongside the broad heightened risk appetite, which helped markets shrug off disappointing preliminary Q3 GDP data. The Hang Seng and Shanghai Composite indexes were underpinned after Chinese Industrial Production and Retail Sales topped forecasts, while sentiment was also supported by reports that China is mulling CNY 1 trillion of new funding to boost the housing market and after the PBoC conducted the largest MLF net injection in seven years.
FX
The US Dollar Index (DXY) traded rangebound on Wednesday, with some slight reprieve from yesterday's post-CPI selling. Money markets have begun to price in 100 basis points of rate cuts for next year, which has weighed on the dollar. EUR/USD took a breather, holding a firm footing above 1.0800 after benefiting from the dollar's recent decline. GBP/USD was contained by resistance near the 1.2500 level, with investors turning their attention to incoming UK CPI data. USD/JPY moved off its lows amid the positive risk appetite and weaker-than-expected GDP data, but remained beneath the 151.00 level due to the recent narrowing of yield differentials. The Antipodeans were kept afloat by the constructive mood and stronger-than-expected Chinese activity data. The PBoC set USD/CNY mid-point at 7.1752 vs exp. 7.2564 (prev. 7.1769).
In Brazil, President Lula met with his economic team and Economy Minister Haddad to discuss a possible change in the fiscal target, but the meeting was inconclusive.
Commodities Crude oil futures lacked conviction after the prior day's whipsawing and inconsequential private sector inventory data. Oil trader Vitol expects a fairly balanced to slight surplus in the global oil market for 2024. Spot gold retained its post-CPI gains, while copper futures only marginally benefitted from the positive mood and encouraging Chinese activity data.
Key takeaways:
APAC stocks rise on softer US CPI
European futures point higher
US House passes temporary spending bill
DXY stuck just above 104
USD/JPY sub-151
EUR/USD takes a breather above 1.0800
GBP/USD contained by resistance near 1.2500
AUD and NZD kept afloat by constructive mood
Crude futures lack conviction
Spot gold retains post-CPI gains
Copper futures only marginally benefit from positive mood
Other majors hold onto gains vs. greenback
ASX 200 shrugs off acceleration in Wage Price Index
Nikkei 225 gaps above 33,000
Hang Seng and Shanghai Comp top forecasts
China mulling CNY 1 trillion housing market boost
PBoC conducts largest MLF net injection in seven years
Looking ahead:
Highlights include French Unemployment, UK CPI & RPI, French & Italian CPI (Final), EZ Trade Balance & Industrial Production, US Retail Sales, Japanese Trade, Fed's Barr & Barkin, Biden-Xi Meeting, Supply from 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
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