Wednesday 10th October: Asian markets cautious as growth woes linger

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IC Markets Market Review
IC Markets Market Review

Global Markets:

  • Asian Stock Markets : Nikkei up 0.08%, Shanghai Composite down 0.09%, Hang Seng up 0.49%, ASX up 0.14%
  • Commodities : Gold at $1193.50 (+0.17%), Silver at $14.43 (+0.17%), Brent Oil at $84.84 (-0.19%), WTI Oil at $74.69 (-0.36%)
  • Rates : US 10-year yield at 3.212, UK 10-year yield at 1.715, Germany 10-year yield at 0.546

News & Data:

  • (JPY) Core Machinery Orders m/m 6.80% vs -3.90% expected
  • (AUD) Westpac Consumer Sentiment 1.00% vs -3.00% previous
  • (USD) IBD/TIPP Economic Optimism 57.8 vs 54.6 expected
  • (CAD) Housing Starts 189K vs 203K expected
  • (USD) NFIB Small Business Index 107.9 vs 108.9 expected
  • (EUR) German Trade Balance 18.3B vs 15.9B expected
  • (JPY) Economy Watchers Sentiment 48.6 vs 47.3 expected
  • China’s yuan to pare losses on hopes trade risks will subside: Reuters poll
  • Williams: Moving Toward ‘Normal’ U.S. Monetary Policy
  • Mortgage rates jump past 5%, signaling more home price cuts ahead

Markets Update:

Asian shares barely moved on Wednesday after world stocks hit eight-week lows the previous day on worries about global economic growth, although the British pound stayed firm on hopes for a Brexit deal. Investors are treading cautiously following the mixed cues from Wall Street amid lingering worries about the impact of rising interest rates and U.S.-China tensions. Investors also digested U.S. President Donald Trump’s comments that he did not like the Federal Reserve‘s decision to continue raising interest rates.

In Japan, the Nikkei 225 shed most of its earlier gains to trade largely flat in the afternoon, while the Topix remained higher by around 0.2 percent, with most sectors trending in positive territory. Earlier in the day, data showed that core machinery orders in Japan rose above expectations in August, suggesting possible growth in capital expenditure. In the Greater China region, the Hang Seng index in Hong Kong was up by 0.49 percent in the afternoon. Over on the mainland, the Shanghai composite was lower by 0.09 percent after trading higher earlier, while the Shenzhen composite declined by about 0.1 percent. South Korea’s KOSPI was down 1.1% after Trump said he will not be meeting North Korean leader Kim Jong-un before the U.S. midterm elections on Nov 6.

The dollar dipped due to a fall in U.S. bond yields after touching a seven-week peak against a basket of currencies. The dollar index (DXY) last traded flat at 95.586. Sterling continued to gain after a report that rekindled hopes that Britain and the European Union are on the brink of a Brexit deal.

The International Monetary Fund cut global economic growth forecasts for 2018 and 2019, as well as its U.S. and China estimates for next year, saying the two countries would feel the brunt of the impact of their trade war next year.

Oil prices edged lower on Wednesday after the IMF lowered its global growth forecasts but prices were somewhat supported as Hurricane Michael churned towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of Mexico crude output.

Upcoming Events:

  • 09:30 AM GMT – (GBP) GDP m/m
  • 09:30 AM GMT – (GBP) Manufacturing Production m/m
  • 10:00 AM GMT – (GBP) MPC Member Haldane Speaks
  • 01:30 PM GMT – (USD) PPI m/m
  • 01:30 PM GMT – (USD) Core PPI m/m
  • Tentative – (USD) Treasury Currency Report
  • 11:00 PM GMT – (USD) FOMC Member Bostic Speaks
  • 11:30 PM GMT – (AUD) RBA Assist Gov Ellis Speaks
  • &more…

 

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