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Markets Update: APAC Stocks Mixed on Soft US Handoff, FOMC Minutes Uneventful, Gaza Hostage Exchange Agreed, China Growth Target Recommended, UK Tax Breaks Incoming, Binance Founder Steps Down.
Economic Calendar
Global Markets Roundup: 22 Nov 2023
Asia-Pacific stocks traded mixed on Wednesday following a soft handover from Wall Street. Sentiment in the US was dampened by weak data and pre-Thanksgiving positioning. The Federal Open Market Committee (FOMC) minutes released on Wednesday stated that the committee saw interest rates remaining restrictive for some time. However, the minutes were largely uneventful and had little impact on price action. In a positive development, Hamas confirmed an agreement with Israel for a four-day pause in Gaza hostilities.
The agreement also includes the release of hostages from both sides. Chinese government advisers recommended a 4.5%-5.5% growth target for 2024. They also noted that maintaining China's growth pace next year will require more fiscal stimulus. UK Chancellor Hunt is set to unveil an annual £9 billion permanent tax break for businesses in his Autumn Statement. Hunt is also expected to cut national insurance for employees and the self-employed. In a major development, Binance founder Changpeng Zhao has agreed to step down and plead guilty to violating money laundering rules.
The Australian ASX 200 index was rangebound on Wednesday, with losses in the tech and consumer sectors offsetting resilience in defensive stocks. This mixed performance reflects the ongoing uncertainty in the global economy. The Westpac Leading Index also showed a slight contraction, adding to the cautious mood among investors. The Japanese Nikkei 225 index was the outperformer in the region, clawing back initial losses in an early turnaround. This resilience comes despite the government cutting its view on the overall economy for the first time since January. The positive performance of the Nikkei 225 suggests that investors are looking past near-term concerns and focusing on longer-term growth prospects. The Hong Kong Hang Seng index and the Chinese Shanghai Composite index were cautious, with price action rangebound amid a lack of fresh macro drivers from China. However, the Hang Seng benchmark was cushioned by strength in Baidu following its earnings report. European equity futures are indicative of a marginally higher open, with the Euro Stoxx 50 index up 0.1%. This positive sentiment may be due to hopes for a ceasefire in Gaza and the recommendation of a 4.5%-5.5% growth target for China in 2024.
FX
The US Dollar Index (DXY) was confined to a tight range on Wednesday, trading between 103.47 and 103.60. The muted performance follows recent soft data and uneventful FOMC minutes, which noted that the committee sees rates remaining restrictive for some time.
EUR/USD lacked direction but was off the prior day's lows after a mild rebound from support at the 1.0900 level. ECB officials, including President Lagarde, expect headline inflation to rise again slightly in the coming months.
GBP/USD took a breather following a return to the 1.2500 territory ahead of the Autumn Statement, in which Chancellor Hunt is expected to unveil a £9 billion annual permanent tax break for businesses and cut national insurance.
USD/JPY traded sideways around the 148.00 handle after yesterday's intraday rebound from a two-month trough.
AUD and NZD were rangebound alongside the mixed risk appetite and non-committal mood across the FX space. The PBoC set the USD/CNY mid-point at 7.1254 vs exp. 7.1468 (prev. 7.1406).
COMMODITIES
Crude oil futures were rangebound on Wednesday, with upside capped by resistance at the USD 78/bbl level. Prices were unmoved by the substantially larger-than-expected build in headline private sector crude inventories and the confirmation of a temporary Gaza truce.
US Energy Inventory Data (bbls): Crude +9.1mln (exp. +1.2mln), Gasoline -1.8mln (exp. -0.2mln), Distillates -3.5mln (exp. -0.8mln), Cushing +0.6mln.
Iraq's Kurdistan region PM Barzani reportedly played down the prospect of an imminent restart of crude exports through the Iraq-Turkey Pipeline.
Spot gold traded sideways and made another attempt to reclaim the USD 2,000/oz level.
Copper futures were subdued and trickled back below USD 3.80/lb alongside the mixed risk appetite.
Looking ahead, key highlights include UK CBI Trends, US Durable Goods, IJC, EZ Consumer Confidence (Flash), UoM Inflation Expectations (Final), UK Autumn Statement, ECB FSR, speeches from RBA's Bullock, ECB's Elderson, and BoC's Macklem, supply from Germany and the US, and earnings from Thyssenkrupp, Severn Trent, Kingfisher, Deere & Co.
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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