Wednesday 9th June 2021: Markets mostly lower on Chinese inflation data

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Global Markets:

·        Asian Stock Markets : Nikkei up 0.46%, Shanghai Composite down 0.76%, Hang Seng down 0.81%, ASX up 1.05%

·        Commodities : Gold at $1902.15 (-0.15%), Silver at $27.88 (-0.78%), Brent Oil at $70.54 (+0.41%), WTI Oil at $67.92 (+0.30%)

·        Rates : US 10-year yield at 1.606, UK 10-year yield at 0.817, Germany 10-year yield at -0.191

News & Data:

·        (CNY) CPI y/y 1.30% vs 1.60% expected

·        (NZD) Prelim ANZ Business Confidence -0.4 vs 1.8 previous

·        (EUR) German ZEW Economic Sentiment 79.8 vs 86 expected

·        (EUR) ZEW Economic Sentiment 81.3 vs 85.5 expected

·        Chinese CPI disappoints, PPI rises at fastest pace since 2008

Markets Update:

Asian stock markets are trading mostly lower on Wednesday, following the lack of cues overnight from Wall Street. Traders are refraining from making significant moves ahead of the release of the U.S. inflation data, due on Thursday, for indications on the outlook for the world’s biggest economy. Traders are also cautious amid the high coronavirus cases in most markets in the region.

The Japanese stock market is modestly lower on Wednesday, extending the losses of the previous session, with the benchmark Nikkei index just below the 28,900 level. Mainland Chinese stocks were higher by the afternoon, with the Shanghai composite climbing 0.4% while the Shenzhen component advanced 0.2%.

Inflation data from China showed its producer price index jumped 9.0% from a year earlier, the highest in over 12 years, on surging commodity prices. The rise in consumer prices, however, was softer than expected, helping to mitigate concerns. While China’s central bank is slowly scaling back pandemic-driven stimulus, top leaders have vowed to avoid any sharp policy turns and keep borrowing costs low.

In Australia, the benchmark S&P/ASX 200 just above the 7,300 level near all-time highs. Stronger commodity prices helped the big miners and energy stocks drive the market, but it gave away some of the gains on release of data that showed consumer confidence slipping for a second straight month in June.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.084 — hovering above the 90 level that it fell below earlier in the week. Oil prices held firm after U.S. Secretary of State Antony Blinken said that even if the United States were to reach a nuclear deal with Iran, hundreds of U.S. sanctions on Tehran would remain in place.

Upcoming Events:

·        02:00 PM GMT – (CAD) BOC Rate Statement

·        02:00 PM GMT – (CAD) Overnight Rate

·        02:30 PM GMT – (USD) Crude Oil Inventories

·        05:01 PM GMT – (USD) 10-y Bond Auction