Tuesday 9th July: Asian stocks fall to two-week low amidst fading hopes of Fed rate cut

IC Markets No Comments
Tuesday 9th July: Asian stocks fall to two-week low amidst fading hopes of Fed rate cut 1

Global Markets:

  • Asian Stock Markets : Nikkei up 0.068%, Shanghai Composite down 0.31%, Hang Seng down 0.67%, ASX down 0.23%
  • Commodities: Gold at $1395.05 (-0.35%), Silver at $15.07 (+0.15%), Brent Oil at $64.11 (0.00%), WTI Oil at $57.57 (-0.16%)
  • Rates : US 10-year yield at 2.037, UK 10-year yield at 0.704, Germany 10-year yield at -0.370

News & Data:

  • (AUD) NAB Business Confidence 2 vs 7 previous
  • (JPY) M2 Money Stock y/y 2.30% vs 2.60% expected
  • (JPY) Average Cash Earnings y/y -0.20% vs -0.60% expected
  • (GBP) BRC Retail Sales Monitor y/y -1.60% vs -1.50% expected
  • (USD) Consumer Credit m/m 17.1B vs 15.2B expected
  • (EUR) Sentix Investor Confidence -5.8 vs 0.3 expected
  • (EUR) German Trade Balance 18.7B vs 16.8B expected
  • (EUR) German Industrial Production m/m 0.30% vs 0.40% expected
  • (JPY) Economy Watchers Sentiment 44 vs 43.9 expected
  • Number of Australian properties resold at a loss climbs to six-year high
  • Japan real wages fall for a fifth straight month in May

Markets Update:

Asian stocks fell to their lowest levels in two and a half weeks on Tuesday as hopes dwindled for a hefty interest rate cut by the U.S. Federal Reserve at the end of the month, while technology companies were pulled lower by Apple Inc.’s overnight slump.

Investors have rushed to scale back Fed rate cut expectations following unexpectedly strong gains in U.S. jobs for June, with U.S. stock markets falling for a second straight day. Markets previously expected an interest rate cut later this month, but recent data that showed the American economy was better-than-expected increased uncertainty over what to expect from the Fed’s July policy meeting.

Asian shares are mostly trading weak after a strong jobs report last Friday. In China, the Shanghai Composite is 0.3% lower, while Hong Kong’s Hang Seng fell 0.67%. The Australian share market is tracking lower for the second day on the back of Wall Street falling, from its record highs; ASX 200 closed 0.1% lower at 6,665.7 points on Tuesday.  Japan’s Nikkei gained on Tuesday morning as a retreat in the yen helped to lift some exporters while Apple suppliers and other technology firms dropped, in step with Apple.

Treasury yields fell on Monday as investors searching for clues on the outlook for interest-rate cuts looked ahead to June’s consumer prices data and Federal Reserve Chairman Jerome Powell’s testimony on the economic outlook before lawmakers later this week. The In the currency market, fading Fed cut expectations helped the dollar. The dollar changed hands at 108.75 yen, having risen up to 108.81 yen in the previous session, its highest in more than a month.

Oil prices are slightly softer on Tuesday amidst demand concerns following the U.S.-China trade war are dragging on the global economy, although the potential for conflicts in the Middle East offered support. Gold prices slipped below the $1,400 level on Tuesday in Asia ahead of speeches by multiple U.S. Federal Reserve officials in the next couple of days.

Upcoming Events:

  • 10:00am GMT – (USD) JOLTS Job Openings
  • Tentative – (USD) IBD/TIPP Economic Optimism
  • 10:10am GMT – (USD) FOMC Member Bullard Speaks
  • 2:00pm GMT – (USD) FOMC Member Quarles Speaks
  • 6:45pm GMT – (NZD) FPI m/m
  • 7:50pm GMT – (JPY) PPI y/y
  • 8:30pm GMT – (AUD) Westpac Consumer Sentiment
  • 9:30pm GMT – (CNY) CPI y/y
  • 9:30pm GMT – (CNY) PPI y/y
  • &more…

Published by

IC Markets

IC Markets is revolutionizing on-line forex trading; on-line traders are now able to gain access to pricing and liquidity previously only available to investment banks and high net worth individuals.