Wednesday 10th July: Asian market mixed in morning trade as investors count on Powell

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Wednesday 10th July: Asian market mixed in morning trade as investors count on Powell 1

 

Global Markets:

  • Asian Stock Markets : Nikkei down 0.15%, Shanghai Composite down 0.24%, Hang Seng up 0.21%, ASX up 0.32%
  • Commodities: Gold at $1394.30 (-0.44%), Silver at $15.10 (-0.30%), Brent Oil at $64.75 (+0.92%), WTI Oil at $58.64 (+1.40%)
  • Rates : US 10-year yield at 2.079, UK 10-year yield at 0.718, Germany 10-year yield at -0.339

News & Data:

  • (CNY) PPI y/y 0.00% vs 0.30% expected
  • (CNY) CPI y/y 2.70% vs 2.70% expected
  • (AUD) Westpac Consumer Sentiment -4.10% vs -0.60% previous
  • (JPY) PPI y/y -0.10% vs 0.40% expected
  • (NZD) FPI m/m -0.70% vs 0.70% previous
  • (USD) JOLTS Job Openings 7.32M vs 7.51M expected
  • (CAD) Building Permits m/m -13.00% vs -10.00% expected
  • (CAD) Housing Starts 246K vs 209K expected
  • (USD) NFIB Small Business Index 103.3 vs 103.2 expected
  • (EUR) Italian Retail Sales m/m -0.70% vs 0.20% expected
  • (JPY) Prelim Machine Tool Orders y/y -38.00% vs -27.30% previous
  • (CHF) Unemployment Rate 2.30% vs 2.40% expected
  • Sentiment falls despite interest rate cuts and tax relief
  • K. Parliament backed amendment aiming to prevent a no-deal Brexit

Markets Update:

Asian shares pulled ahead on Wednesday while rising Treasury yields lifted the dollar as investors waited anxiously to hear if the world’s most powerful central banker would confirm or confound expectations for U.S. easing this month.

The market rallied through much of June after the central bank signalled it’s prepared to cut rates to offset slowing global growth and the fallout from U.S. trade conflicts. But an unexpectedly strong U.S. jobs report last Friday has dimmed investors’ expectations. Many traders still expect the Fed will cut its benchmark rate by a quarter percentage point at the end of the month, but fewer are now expecting a half-point reduction. Investors will now turn their focus to a speech by Federal Reserve Jerome Powell, who is set to get his two-day testimony on Capitol Hill underway on Wednesday at 10:00 AM ET.

Asian stocks are mixed on Wednesday morning. Japan’s Nikkei lagged with a loss of 0.1% amidst cautious trading. Chinese markets barely budged following the release of the country’s latest inflation data. China’s Consumer Price Index (CPI) in June rose 2.7% while the Producer Price Index (PPI) in June was unchanged from a year earlier. Data also showed inflation remained stubbornly subdued despite a spike in pork prices. Hong Kong’s Hang Seng Index gained 0.2% while Australia’s ASX 200 inched up by 0.5%. Australian consumer sentiment weakened despite interest rate cuts and tax relief.

The cooling in U.S. rate fever has seen bonds give back just a little of their huge rally, with yields on two-year Treasuries rising to 2.079% from the recent trough of 1.696%. That in turn has helped the dollar bounce on a basket of currencies to 97.500 (DXY) from a June low of 95.843.days. The dollar’s gains took the shine off gold, which eased 0.4% to $1,394.3 per ounce. Gold prices were set to fall for a fourth straight session on Wednesday in Asia as traders continued to dial back expectations of aggressive interest rate cuts.

Oil prices rose on Wednesday after industry data showed U.S. stockpiles fell far more than expected, alleviating concerns about oversupply, while major U.S. producers evacuated rigs in the Gulf of Mexico ahead of a brewing storm.

Upcoming Events:

  • 10:00am GMT – (CAD) BOC Monetary Policy Report
  • 10:00am GMT – (CAD) BOC Rate Statement
  • 10:00am GMT – (CAD) Overnight Rate
  • 10:00am GMT – (USD) Fed Chair Powell Testifies
  • 10:00am GMT – (USD) Final Wholesale Inventories m/m
  • 10:15am GMT – (CAD) BOC Press Conference
  • 10:30am GMT – (USD) Crude Oil Inventories
  • 1:01pm GMT – (USD) 10-y Bond Auction
  • 1:10pm GMT – (GBP) MPC Member Tenreyro Speaks
  • 1:30pm GMT – (USD) FOMC Member Bullard Speaks
  • 2:00pm GMT – (USD) FOMC Meeting Minutes
  • 7:01pm GMT – (GBP) RICS House Price Balance
  • 9:00pm GMT – (AUD) MI Inflation Expectations
  • 9:30pm GMT – (AUD) Home Loans m/m
  • &more…

 

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