Global Markets:
- Asian Stock Markets : Nikkei up 0.01%, Shanghai Composite down 0.26%, Hang Seng down 0.35%, ASX up 0.85%
- Commodities : Gold at $1971.65 (+0.49%), Silver at $24.86 (+0.12%), Brent Oil at $83.00 (-0.30%), WTI Oil at $79.35 (-0.34%)
- Rates : US 10-year yield at 3.885, UK 10-year yield at 4.316, Germany 10-year yield at 2.413
News & Data:
- (USD) CB Consumer Confidence 117.0 vs 112.1 expected
- (USD) Richmond Manufacturing Index -9 vs -9 expected
- (JPY) SPPI y/y 1.2% vs 1.5% expected
Markets Update:
Investors in Asia-Pacific markets braced for the U.S. Federal Reserve’s impending rate decision, resulting in a mostly downward trend. The Fed is expected to approve its 11th interest rate increase since March 2022, with market participants anticipating a quarter percentage point hike, pushing the benchmark borrowing rate to a target range of 5.25%-5.5%. This rate adjustment would be the highest since January 2001. South Korea’s Kospi index bore the brunt of the losses in the region, plunging by 2% primarily due to declines in tech and consumer services stocks.
In contrast, the Australian stock market stood out with a positive performance. The S&P/ASX 200 index surged by 0.85%, reaching a peak of 7,396.8, its highest point since February 2023. Australia’s inflation rate showed a growth of 6% on an annual basis in the June quarter, although it was slower than the 7% seen in the first quarter, as reported by official data. Despite the moderation in inflation, these figures contributed to an optimistic market sentiment, with investors maintaining their confidence in the country’s ongoing economic recovery.
The Hang Seng index retreated by 0.35%, while both the Shanghai Composite and Shenzhen Component fell by 0.3% and 0.5%, respectively. In sharp contrast, the United States’ Dow Jones Industrial Average extended its winning streak to an impressive 12 days, rising by 0.08%, marking its longest rally since February 2017. Moreover, the S&P 500 added 0.28%, and the Nasdaq Composite saw significant growth of 0.61% during overnight trading.
With investors closely monitoring the U.S. Federal Reserve’s rate decision, market dynamics are expected to remain volatile in the short term. Regional markets are responding differently to these developments, with Australia displaying resilience, while South Korea and other Asian markets are facing challenges due to concerns surrounding tech and consumer services sectors.
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