Wednesday 5th December: Asian Markets lower after Wall Street plunge

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Wednesday 5th December: Asian Markets lower after Wall Street plunge 1

Global Markets:

  • Asian Stock Markets : Nikkei down 0.59%, Shanghai Composite down 0.68%, Hang Seng down 1.79%, ASX down 0.78%
  • Commodities : Gold at $1240.55 (-0.49%), Silver at $14.52 (-0.82%), Brent Oil at $61.25 (-1.34%), WTI Oil at $52.59 (-1.24%)
  • Rates : US 10-year yield at 2.915, UK 10-year yield at 1.284, Germany 10-year yield at 0.253

News & Data:

  • (AUD) GDP q/q 0.30% vs 0.60% expected
  • (GBP) Construction PMI 53.4 vs 52.5 expected
  • (AUD) Cash Rate 1.50% vs 1.50% expected
  • (AUD) Current Account -10.7B vs -10.2B expected
  • Italy reported to consider reducing citizens’ income costs in budget revision – Il Messaggero
  • South Korean experts see growing risks from slowing economy, China: BOK survey

Markets Update:

Asian stock markets are in negative territory on Wednesday following the overnight plunge on Wall Street as a yield curve inversion, or short-term debt yields trading above longer-term debt yields, stoked fears about an upcoming economic slowdown. Mounting skepticism about the trade war truce reached between U.S. President Donald Trump and Chinese President Xi Jinping also weighed on the markets.

The mainland Chinese markets, closely watched in relation to Beijing’s ongoing dispute with Washington, remained cautious by the end of the morning session. The Shanghai composite declined 0.68 percent while the Shenzhen composite was down 0.6 percent.

The Japanese market is extending losses from the previous session as a stronger yen dragged exporters’ stocks lower. Nikkei 225 slipped 0.6 percent in afternoon trade while the Topix shed 0.5 percent. In Australia, the ASX 200 fell 0.94 percent in afternoon trade, with most sectors trading lower. The moves came after the country’s gross domestic product (GDP) data for the third quarter came in below expectations.

Concerns about slowing U.S. growth have accelerated the flattening of the yield curve, a phenomenon in which longer-dated debt yields fall faster than their shorter-dated counterparts. The spread between the two-year and 10-year Treasury yields was at its flattest level in more than a decade and edging closer to an inversion, when long rates fall below short rates.

The U.S. currency bounced modestly after slipping the previous day on lower Treasury yields. The greenback rose 0.25 percent to 113.06 yen after losing 0.75 percent the previous day against the safe-haven Japanese currency. Oil prices fell, weighed down by swelling U.S. inventories and concerns that slowing economic activity will sap demand for commodities.

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