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Markets Update: ASX Soars to Record Highs Despite Global Headwinds, Asian Markets Mixed.
Economic Calendar
Global Markets Roundup: 31 Jan 2023
APAC stocks lacked direction on Wednesday as investors digested a flood of earnings reports and key data releases at month-end. Tech titans tumbled in the US after disappointing earnings. Alphabet (GOOG) slid 5.8% on missed advertising revenue, while Microsoft (MSFT) dipped 0.3% on lower-than-expected guidance for its More Personal Computing segment. China's weak economic data weighed on Hang Seng and Shanghai Comp. Manufacturing PMI remained in contraction territory for a fourth consecutive month, dampening sentiment. The DXY edged higher ahead of the FOMC meeting, while USD/JPY fluctuated after hawkish comments from Bank of Japan's SoO sparked speculation about policy tightening. Euro Stoxx 50 future remained unchanged following a 0.5% gain for the cash market in Tuesday's session.
The Australian market bucked the regional downward trend on Wednesday, as the ASX 200 shrugged off early weakness to reach record highs, fueled by easing inflation concerns. Softer-than-expected inflation data triggered a drop in yields, boosting investor sentiment and propelling the benchmark index to new heights. However, other Asian markets struggled to find traction amid a confluence of bearish factors. Japan's Nikkei 225 initially slumped after disappointing industrial production and retail sales figures, compounded by hawkish-leaning comments from the Bank of Japan. The index ultimately managed to recoup some losses but finished the day in negative territory. The Hang Seng and Shanghai Composite also closed lower, weighed down by weak Chinese manufacturing activity. The latest purchasing managers' index (PMI) data revealed that manufacturing contracted for a fourth consecutive month, raising concerns about the health of the world's second-largest economy. Meanwhile, European equity futures signaled a flat open, suggesting subdued sentiment ahead of key economic data releases later in the day. The Euro Stoxx 50 future remained unchanged following a 0.5% gain for the cash market in Tuesday's session.
FX
DXYÂ eked slight gains amid the cautious mood but with gains capped as participants await the FOMC.
EUR/USDÂ marginally declined after hitting some near-term resistance around the 1.0850 level, while participants also await a slew of incoming data releases from Europe including French and German inflation.
GBP/USDÂ slightly weakened after recently failing to reclaim the 1.2700 status.
USD/JPYÂ was choppy with early pressure following some hawkish-leaning remarks from the BoJ's SoO.
AUD and NZDÂ were pressured by the cautious risk environment and softer-than-expected Australian CPI.
PBoC set USD/CNY mid-point at 7.1039 vs exp. 7.1727 (prev. 7.1055).
FIXED INCOME
10-year UST futures extended on yesterday's intraday rebound amid a softer yield environment and as the attention turns to the looming FOMC and quarterly refunding announcement.
Bund futures continued to claw back yesterday's initial data-induced losses and returned above the 135.00 level.
10-year JGB futures were pressured following the BoJ Summary of Opinions from the January meeting which included some hawkish-leaning rhetoric.
COMMODITIES
Crude futures were choppy after the prior day's fluctuations and with bullish private sector inventory data offset by the mostly negative risk environment and mixed geopolitical headlines.
Spot gold was contained amid a firmer dollar heading into the FOMC policy announcement.
Copper futures were lacklustre amid the cautious mood and after Chinese Manufacturing PMI remained in contraction territory for a fourth consecutive month.
Key events to watch on Thursday:
French and German CPI data
German Retail Sales and Unemployment
US ADP Employment Report, Average Hourly Earnings
Canadian GDP
Fed and Bank of Canada policy announcements with press conferences
German supply chain survey
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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