Global Markets:
- Asian Stock Markets : Nikkei down 0.55%, Shanghai Composite up 0.25%, Hang Seng down 1.15%, ASX down 0.54%
- Commodities : Gold at $7255.70 (-0.12%), Silver at $2034.45 (-0.41%), Brent Oil at $25.82 (-0.32%), WTI Oil at $76.44 (-1.29%)
- Rates : US 10-year yield at 72.780, UK 10-year yield at 3.513, Germany 10-year yield at 3.911
News & Data:
- (EUR) Italian Industrial Production m/m -0.60% vs 0.20% expected
- (EUR) German Final CPI m/m 0.40% vs 0.40% expected
- (JPY) Leading Indicators 97.50% vs 97.90% expected
- (USD) IBD/TIPP Economic Optimism 41.6 vs 48.2 expected
- (USD) NFIB Small Business Index 89 vs 89.6 expected
Markets Update:
Asian equity markets were mixed on Tuesday as investors awaited the US inflation data and the outcome of the Fed meeting. China’s disappointing import figures raised concerns about the strength of its economic recovery and its demand for commodities. Crude oil prices rose as the US announced plans to replenish its strategic reserve, while gold prices hit a 13-month high amid a weaker dollar and lower Treasury yields.
The Hang Seng Index fell 2.1% as technology, healthcare and consumer stocks dragged the market lower. SMIC, China’s largest chipmaker, plunged 7.4% amid rumors of a delay in its ERNIE chat bot launch. Hong Kong and China Gas surged 6.3% on expectations of higher natural gas prices in China.
The CSI 300 Index dropped 0.9% as semiconductors, media and liquor stocks led the losses. Bank of China and CITIC Securities retreated from their recent highs as investors took profits. Tencent’s cash dividend weighed on Meituan, which fell 3.2%.
The Nikkei 225 Index edged up 0.1% as gains in industrials, utilities and telecoms offset losses in materials, consumer staples and financials. Toyota Motor rose 1.2% after reporting a record quarterly profit and raising its full-year outlook. SoftBank Group slipped 0.8% ahead of its earnings release.
The US dollar index fell 0.3% to 91.8 as investors awaited the US CPI data and the Fed’s policy decision. The greenback weakened against most major currencies, except the Japanese yen, which was flat at 109.6 per dollar.
Crude oil prices rose 1.4% to $72.3 per barrel as the US said it would buy up to 11 million barrels of crude oil for its strategic reserve over the next two months. The move was seen as a sign of confidence in the global oil demand recovery.
Gold prices rose 1% to $2,022 per ounce as the dollar weakened and Treasury yields fell. The US 10-year yield dipped below 3.5% ahead of the inflation data and the Fed meeting.
Upcoming Events:
- 12:30 pm GMT – (USD) CPI m/m
- 12:30 pm GMT – (USD) CPI y/y
- 12:30 pm GMT – (USD) Core CPI m/m
- 04:00 pm GMT – (CHF) SNB Chairman Jordan Speaks
- 05:01 pm GMT – (USD) 10-y Bond Auction
