Thin volumes as investors await Fed outcomes with crossed fingers

IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei down 0.80%, Shanghai Composite down 0.19%, Hang Seng up 0.84%, ASX up 0.57%
  • Commodities : Gold at $1349.05 (+0.46%), Silver at $14.88 (+0.36%), Brent Oil at $60.84 (-0.16%), WTI Oil at $51.80 (-0.25%)
  • Rates : US 10-year yield at 2.075, UK 10-year yield at 0.853, Germany 10-year yield at -0.250

News & Data:

  • (USD) TIC Long-Term Purchases 46.9B vs 30.8B expected
  • (USD) NAHB Housing Market Index 64 vs 67 expected
  • (USD) Empire State Manufacturing Index -8.6 vs 12.1 expected
  • (CAD) Foreign Securities Purchases -12.80B vs 2.33B expected
  • (GBP) Rightmove HPI m/m 0.30% vs 0.90% previous
  • AUD/JPY plummets to fresh 5-month low on RBA minutes
  • After Fed meets, expect bigger move than markets have priced in

Markets Update:

Asian markets traded mixed in muted early trading Tuesday, as investors awaited key central bank meetings later this week. The U.S. Federal Open Market Committee will hold a two-day meeting starting Tuesday. Traders will keep a close watch on a policy statement, to be released Wednesday, and a news conference held by Fed Chairman Jerome Powell shortly after that.

Financial markets had rallied on the remarks, which fuelled hopes that the Fed would cut interest rates this year. Although a rate cut isn’t expected this time around, fresh comments from Powell could support another wave of buying or have investors swing the other way.

The Japanese market gave up modest gains earlier in the session and is currently lower. The Nikkei lost 0.8% in afternoon trade, with market heavy-weights Softbank and Fast Retailing both losing close to 1%. The Shanghai Composite lost 0.2%, whereas the Shenzhen Composite traded lower by 0.4%. Hang Seng bucked the trend to trade higher by 0.8%, as Tencent jumped by almost as much as 2%. Down under, the ASX gained 0.6%, even as the RBA minutes justified its June 4 rate cut, the first since 2016.

The Australian dollar fell to a fresh five-month low of $0.6851 after minutes from the RBA’s June meeting. The euro was a shade higher at $1.1231 after spending the previous day confined to a narrow range. U.S. crude oil futures shed 0.13% to $51.86 per barrel after retreating 1.1% the previous day and Brent crude lost 0.2% to $60.81 per barrel following Monday’s loss of 1.7%.

Upcoming Events:

  • 09:00 AM GMT – (EUR) ECB President Draghi Speaks
  • 10:00 AM GMT – (EUR) German ZEW Economic Sentiment
  • 01:30 PM GMT – (CAD) Manufacturing Sales m/m
  • 01:30 PM GMT – (USD) Building Permits
  • 03:00 PM GMT – (GBP) BOE Gov Carney Speaks
  • &more…

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