Global Markets:
- Asian Stock Markets : Nikkei up 0.12%, Shanghai Composite up 1.14%, Hang Seng up 0.21%, ASX down 0.92%
- Commodities : Gold at $1989.95 (-0.11%), Silver at $24.96 (-1.07%), Brent Oil at $79.33 (+0.03%), WTI Oil at $75.61 (-0.07%)
- Rates : US 10-year yield at 3.524, UK 10-year yield at 3.802, Germany 10-year yield at 2.357
News & Data:
- (AUD) Cash Rate 3.85% vs 3.60% expected
- (USD) ISM Manufacturing Prices 53.2 vs 49.4 expected
- (USD) ISM Manufacturing PMI 47.1 vs 46.8 expected
Markets Update:
Asian markets were mixed on Tuesday as investors awaited the outcome of the Federal Reserve’s policy meeting, where a 25 basis point rate hike is widely expected. The US dollar gained against most major currencies, supported by higher Treasury yields and strong inflation data. The Japanese yen was the weakest performer, extending its losses after the Bank of Japan signaled a prolonged period of ultra-easy policy last week.
The MSCI Asia Pacific Index edged up 0.1% to 191.35, with gains in technology and consumer discretionary sectors offsetting losses in energy and financials. China and Hong Kong markets were closed for a holiday, while South Korea’s Kospi rose 0.6% to 3,145.03, boosted by strong earnings from Samsung Electronics and LG Display.
Japan’s Nikkei 225 slipped 0.2% to 29,839.71, as investors took profits after the index hit a three-month high on Monday. The yen weakened further to 137.45 per dollar, its lowest level since March, after BOJ Governor Haruhiko Kuroda said the central bank would not exit its massive stimulus program until inflation reaches 2%, which he said could take more than a year and a half.
Australia’s S&P/ASX 200 added 0.3% to 7,095.80, as the Reserve Bank of Australia kept its cash rate and bond-buying program unchanged at its policy meeting. The central bank said it would not increase the cash rate until actual inflation is sustainably within the 2-3% target range, which it does not expect to happen until 2024 at the earliest.
Gold prices fell for a third consecutive session, dropping 0.4% to $1,776.60 an ounce, as the dollar strengthened and investors reduced their holdings of the safe-haven metal ahead of the Fed meeting. Crude oil prices also declined, with Brent crude down 0.6% to $66.32 a barrel and WTI crude down 0.7% to $63.05 a barrel, amid concerns over weak demand in China and India due to rising coronavirus cases.
Upcoming Events:
- 09:00 AM GMT – (EUR) CPI Flash Estimate y/y
- 09:00 AM GMT – (EUR) Core CPI Flash Estimate y/y
- 11:20 AM GMT – (AUD) RBA Gov Lowe Speaks
- 02:00 PM GMT – (USD) JOLTS Job Openings
- 10:45 PM GMT – (NZD) Employment Change q/q
- 10:45 PM GMT – (NZD) Unemployment Rate
