Wednesday 10th July 2024: Asian Markets Mixed Amid Fed’s Dovish Stance and Inflation Data

Global Markets:

  •  Asian Stock Markets : Nikkei up 0.50%, Shanghai Composite down 0.67%, Hang Seng down 0.28% ASX down 0.16%
  • Commodities : Gold at $2379.5 (0.47%), Silver at $31.28 (0.34%), Brent Oil at $84.23 (-0.47%), WTI Oil at $80.91 (-0.57%)
  • Rates : US 10-year yield at 4.281, UK 10-year yield at 4.159, Germany 10-year yield at 2.541

News & Data:

  • (JPY) PPI y/y  2.9% vs 2.9% expected

Markets Update:

Asia-Pacific markets were mixed on Wednesday, despite key Wall Street benchmarks rising following dovish comments from U.S. Federal Reserve Chairman Jerome Powell. Powell expressed caution about maintaining high interest rates, stating that “reducing policy restraint too late or too little could unduly weaken economic activity and employment.” In Asia, investors are focused on inflation data from China and Japan. China’s consumer price index rose 0.2% in June, below the expected 0.4% and down from May’s 0.3%, while the producer price index fell 0.8% year-on-year, matching expectations and showing a softer decline than May’s 1.4%.

The mainland Chinese CSI 300 fell 0.4% following the CPI announcement. Reuters reported that Ping An Insurance, China’s largest insurer, is considering issuing up to $5 billion in convertible bonds. Japan’s corporate goods price index (CGPI) increased by 2.9% in June from a year earlier, higher than the revised 2.6% in May. The Nikkei 225 saw marginal gains, while the broad-based Topix dropped by 0.21%.

South Korea’s Kospi gained 0.13%, whereas the small-cap Kosdaq decreased by 0.2%. The National Samsung Electronics Union announced an indefinite strike starting Wednesday, causing Samsung Electronics shares to fall by 0.22%. Meanwhile, Hanwha Aerospace, a South Korean defense manufacturer, announced a 1.38 trillion won ($1 billion) order from Romania to supply K9 howitzers. Australia’s S&P/ASX 200 declined by 0.18%.

In the U.S., the S&P 500 reached a new record high on Tuesday after Powell’s remarks, rising by 0.07% to 5,576.98, marking its 36th record close of the year. The Nasdaq Composite increased by 0.14% to close at 18,429.29, also ending at a record high. The Dow Jones Industrial Average slightly decreased by 0.13%.

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