11th May 2022 Wednesday: Markets lower broadly on higher than expected Chinese inflation data

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Global Markets:

  • Asian Stock Markets : Nikkei up 0.18%, Shanghai Composite up 0.75%, Hang Seng up 0.80%, ASX up 0.19%
  • Commodities : Gold at $1848.49 (+0.41%), Silver at $21.76 (+1.59%), Brent Oil at $105.66 (+3.12%), WTI Oil at $102.89 (+3.14%)
  • Rates : US 10-year yield at 2.940, UK 10-year yield at 1.819, Germany 10-year yield at 0.969

News & Data:

  • (USD) IBD/TIPP Economic Optimism 41.2 vs 45.5 previous
  • (USD) NFIB Small Business Index 93.2 vs 92.9 expected
  • (EUR) German ZEW Economic Sentiment -34.3 vs -43 expected
  • (EUR) ZEW Economic Sentiment -29.5 vs -42 expected
  • (EUR) Italian Industrial Production m/m 0.00% vs -1.40% expected
  • ECB’s Villeroy: Inflation should be back at around 2% in 2024

Markets Update:

Asian stocks ended mixed on Wednesday, with Chinese and Hong Kong stocks rising after China’s securities watchdog pledged a slew of measures to shore up confidence in the region’s worst-performing stock market. The dollar was on the backfoot and U.S. Treasury yields remained sidelined while gold attempted a recovery from a three-month low ahead of U.S. inflation data due later in the day.

Mainland Chinese stocks led gains regionally, with the Shanghai Composite rising 0.8% while the Shenzhen Component climbed 1.8%. Hong Kong’s Hang Seng index advanced 0.8% on the day. Seoul stocks extended losses for the seventh day running on concerns over high inflation and a global economic downturn. Australian markets eked out modest gains, with mining and healthcare stocks leading the surge.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 103.648 after seeing an earlier high of 103.961. The Fed last week raised interest rates by 50 basis points and Chair Jerome Powell said two more such hikes are likely at the U.S. central bank’s coming policy meetings.

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