Global Markets:
- Asian Stock Markets : Nikkei up 0.48%, Shanghai Composite down 0.06%, Hang Seng down 2.59%, ASX down 0.77%
- Commodities : Gold at $1818.25 (-0.10%), Silver at $20.11 (-0.47%), Brent Oil at $83.01 (-0.34%), WTI Oil at $77.17 (-0.53%)
- Rates : US 10-year yield at 3.989, UK 10-year yield at 3.867, Germany 10-year yield at 2.698
News & Data:
- (JPY) Current Account 0.22T vs 0.80T expected
- (JPY) Bank Lending y/y 3.30% vs 3.20% expected
- (USD) Consumer Credit m/m 14.8B vs 25.2B expected
- (USD) IBD/TIPP Economic Optimism 46.9 vs 47.2 expected
- (USD) Final Wholesale Inventories m/m -0.40% vs -0.40% expected
- (NZD) GDT Price Index -0.70% vs -1.50% previous
- (CHF) Foreign Currency Reserves 771B vs 785B previous
Markets Update:
Asian stock markets are largely in the red on Wednesday, tracking the negative sentiment from global markets in response to US Federal Reserve Chair Jerome Powell’s warning on interest rates. Powell testified before the Senate Banking Committee on Tuesday, stating that interest rates are likely to remain higher for longer than previously expected in order to combat inflation.
The Australian stock market is taking a significant hit on Wednesday, snapping its four-session winning streak, with declines seen across most sectors, particularly in technology, mining, and energy stocks. Meanwhile, China shares seesawed before ultimately closing marginally lower. Hong Kong’s Hang Seng Index fell 2.6%, marking its worst day since late January.
On the other hand, the Japanese stock market is modestly higher on Wednesday, extending its gains from the previous three sessions, supported by gains in technology stocks. Traders are also reacting to domestic data that reveals a record current account deficit in January.
In the US, a closely monitored part of the Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, which is regarded as an economic expectations indicator, hit its deepest level since August 1981, currently sitting at -107.3 basis points.
Crude oil prices also took a hit on Tuesday, with renewed uncertainty surrounding energy demand contributing to the decline, while a surging greenback put further pressure on the commodity. In the currency market, the US dollar continued its charge, reaching a three-month high. The dollar index, which measures the US currency against six major rivals, is also on the rise.
Investors are advised to exercise caution as the global economic landscape continues to grapple with inflationary pressures and the threat of rising interest rates.
Upcoming Events:
- 10:00 AM GMT – (EUR) ECB President Lagarde Speaks
- 01:15 PM GMT – (USD) ADP Non-Farm Employment Change
- 03:00 PM GMT – (CAD) BOC Rate Statement
- 03:00 PM GMT – (CAD) Overnight Rate
- 03:00 PM GMT – (USD) Fed Chair Powell Testifies
- 03:00 PM GMT – (USD) JOLTS Job Openings
- 06:01 PM GMT – (USD) 10-y Bond Auction
