Asian markets extend losses on pretext of lowered expectations for Fed rate cut and trade talks

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IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei down 0.51%, Shanghai Composite down 0.20%, Hang Seng up 0.15%, ASX down 0.26%
  • Commodities : Gold at $1412.05 (-0.47%), Silver at $15.21 (-0.57%), Brent Oil at $65.37 (+1.70%), WTI Oil at $59.08 (+2.16%)
  • Rates : US 10-year yield at 2.004, UK 10-year yield at 0.793, Germany 10-year yield at -0.326

News & Data:

  • (NZD) Official Cash Rate 1.50% vs 1.50% expected
  • (USD) CB Consumer Confidence 121.5 vs 132 expected
  • (USD) Richmond Manufacturing Index 3 vs 7 expected
  • RBNZ Mirrors RBA, Maintains Easing Bias
  • G-20 summit draft communique calls for promotion of free trade

Markets Update:

Asian shares were mostly lower Wednesday as investors awaited developments on the trade friction between the U.S. and China at the Group of 20 meeting. Trade policy remains the biggest source of uncertainty looming over the market. Investors are worried about the trade dispute between the U.S. and China and its potential impact on global economic growth and corporate profits.

On Wall Street, discouraging economic data and cautionary remarks from the head of the Federal Reserve weighed on the market. In an early afternoon speech, the Fed‘s Powell noted that the economic outlook has become cloudier since early May amid uncertainty over trade and global growth.

Nikkei continues to lose on Wednesday and slips 0.5% as risk sentiments dampened on following fall in the Wall Street overnight amidst tempered expectations for a potential interest rate cut. The Shanghai Composite also edged down 0.2%, following the lead of international markets.  Australian stocks dipped 0.26% and Hang Seng marginally rose as investors remained cautious ahead of key trade talks.

The dollar added 0.3% to 107.490 yen after a rebound from a near six-month low of 106.780. U.S. crude oil futures advanced roughly 2% to touch a four-week high of $59.10 per barrel after data showed a decline in U.S. crude stocks. The U.S. data helped underpin a crude market already buoyed by worries over potential U.S.-Iran conflict. Spot gold slipped from a six-year high of $1,438.63 an ounce scaled on Tuesday after the comments from Fed officials trimmed expectations for a rate hike in July.

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