Thursday 23 September 2021: Asian markets gain as Chinese govt steps in on Evergrande

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Global Markets:

  • Asian Stock Markets : Shanghai Composite up 0.38%, Hang Seng up 1.08%, ASX up 1.00%
  • Commodities : Gold at $1765.85 (-0.73%), Silver at $22.71 (-0.85%), Brent Oil at $76.31 (+0.16%), WTI Oil at $72.34 (+0.15%)
  • Rates : US 10-year yield at 1.326, UK 10-year yield at 0.819, Germany 10-year yield at -0.307

News & Data:

  • (EUR) German Flash Services PMI 56 vs 60.3 expected
  • (EUR) German Flash Manufacturing PMI 58.5 vs 61.3 expected
  • (CHF) SNB Policy Rate -0.75% vs -0.75% expected
  • (EUR) French Flash Services PMI 56 vs 56.1 expected
  • (EUR) French Flash Manufacturing PMI 55.2 vs 57.1 expected
  • (USD) Federal Funds Rate <0.25% vs <0.25% expected
  • (USD) Crude Oil Inventories -3.5M vs -3.3M expected

Markets Update:

Asian stock markets are trading mostly higher on Thursday, following the broadly positive cues overnight from Wall Street, amid climbing crude oil prices and easing concerns about the impact of Chinese real estate major Evergrande’s debt woes. Traders are also digesting the U.S. Federal Reserve’s monetary policy announcement and concerns about the spread of the delta variant of the coronavirus in the region.

Hong Kong’s Hang Seng index rose 1%, following losses earlier in the week. Shares of China Evergrande Group jumped more than 17%, paring some gains after soaring more than 20% earlier. That was also after days of losses — although its year-to-date plunge is still more than 80%. The Japanese stock market is closed on Thursday for the Autumnal Equinox. The ASX is significantly higher, led by gains in the materials, financial and energy sector as iron ore and crude oil prices rose sharply, even as traders remain concerned about the domestic coronavirus situation, particularly in New South Wales and Victoria, which is hindering economic activity.

The Fed could begin scaling back asset purchases in November 2021 and complete the process by mid-2022, Chairman Jerome Powell said as the central bank handed down its latest policy decision on Wednesday. The Fed is likely to also begin hiking interest rates after completing the tapering process, he added. The dollar rose after the Fed Chair’s remarks to hit a month-high of 93.526 against a basket of currencies, particularly gaining against the euro and yen, but paused for breath in Asian hours.

Upcoming Events:

  • 08:00 AM GMT – (EUR) Flash Manufacturing PMI
  • 08:00 AM GMT – (EUR) Flash Services PMI
  • 08:30 AM GMT – (GBP) Flash Manufacturing PMI
  • 08:30 AM GMT – (GBP) Flash Services PMI
  • 11:00 AM GMT – (GBP) Asset Purchase Facility
  • 11:00 AM GMT – (GBP) MPC Asset Purchase Facility Votes
  • 11:00 AM GMT – (GBP) Monetary Policy Summary
  • 11:00 AM GMT – (GBP) MPC Official Bank Rate Votes
  • 11:00 AM GMT – (GBP) Official Bank Rate
  • 12:30 PM GMT – (CAD) Core Retail Sales m/m
  • 12:30 PM GMT – (CAD) Retail Sales m/m
  • 12:30 PM GMT – (USD) Unemployment Claims
  • 01:45 PM GMT – (USD) Flash Manufacturing PMI
  • 01:45 PM GMT – (USD) Flash Services PMI