Global Markets:
- Asian Stock Markets : Shanghai Composite up 0.64%, Hang Seng up 1.37%, ASX up 0.82%
- Commodities : Gold at $1969.25 (-0.68%), Silver at $22.50 (-0.63%), Brent Oil at $72.97 (-1.11%), WTI Oil at $67.05 (-1.14%)
- Rates : US 10-year yield at 3.502, UK 10-year yield at 3.369, Germany 10-year yield at 2.181
News & Data:
- (GBP) Public Sector Net Borrowing 15.9B vs 10.1B expected
- (CHF) Trade Balance 3.31B vs 3.45B expected
- (NZD) Credit Card Spending y/y 25.60% vs 18.10% previous
- (NZD) Trade Balance -714M vs -1450M expected
- (EUR) Trade Balance -11.3B vs -17.3B expected
- (EUR) German PPI m/m -0.30% vs -1.30% expected
Markets Update:
Asian stock markets followed Wall Street higher on Tuesday ahead of a Federal Reserve decision on another possible interest rate hike amid worries about global banks. Shanghai, Hong Kong and Seoul advanced while Japanese markets were closed for a holiday. Oil prices declined while gold prices eased as the dollar edged up.
Investors were relieved by measures taken by several central banks to contain a banking crisis and stabilise global financial markets, following the collapse of two U.S. banks and the takeover of troubled Credit Suisse by UBS over the weekend. However, concerns remained about the financial health of other lenders, especially First Republic Bank, which was reportedly in talks for private equity sales.
Traders expected the Fed to go ahead with another rate hike on Wednesday but at a more moderate pace of 0.25 percentage points, down from the 0.5 points previously expected. They also hoped that Fed Chair Jerome Powell would adopt a more cautious tone on future rate increases in light of easing inflationary pressures and the recent banking turmoil.
Gold prices had shot up to their highest level since March 2022 at $2,009.59 on Monday before retreating as investors digested the impact of central bank actions. Oil prices rebounded on Monday but fell again on Tuesday as demand concerns outweighed supply disruptions in Libya and Kazakhstan.
The dollar index, which measures the greenback against a basket of six major currencies, rose 0.1%, making commodities priced in dollars more expensive for holders of other currencies.
Upcoming Events:
- 10:00 AM GMT – (EUR) German ZEW Economic Sentiment
- 12:30 PM GMT – (CAD) CPI m/m
- 12:30 PM GMT – (CAD) Median CPI y/y
- 12:30 PM GMT – (CAD) Trimmed CPI y/y
- 12:30 PM GMT – (CAD) Common CPI y/y
- 12:30 PM GMT – (EUR) ECB President Lagarde Speaks
- 02:00 PM GMT – (USD) Existing Home Sales
