Global Markets:
- Asian Stock Markets : Nikkei down 2.89%, Shanghai Composite down 0.53%, Hang Seng down 1.23%, ASX down 1.34%
- Commodities : Gold at $1248.45 (-0.63%), Silver at $14.64 (-1.18%), Brent Oil at $56.38 (-1.50%), WTI Oil at $47.15 (-2.12%)
- Rates : US 10-year yield at 2.757, UK 10-year yield at 1.285, Germany 10-year yield at 0.236
News & Data:
- (JPY) BOJ Policy Rate -0.10% vs -0.10% expected
- (AUD) Unemployment Rate 5.10% vs 5.00% expected
- (AUD) Employment Change 37.0K vs 20.0K expected
- (NZD) Trade Balance -861M vs -880M expected
- (NZD) GDP q/q 0.30% vs 0.60% expected
- (USD) Federal Funds Rate <2.50% vs <2.50% expected
- (CAD) Trimmed CPI y/y 1.90% vs 2.10% expected
- (CAD) Median CPI y/y 1.90% vs 2.00% expected
- (CAD) Common CPI y/y 1.90% vs 1.90% expected
- (CAD) CPI m/m -0.40% vs -0.40% expected
- (GBP) RPI y/y 3.20% vs 3.20% expected
- (GBP) PPI Input m/m -2.30% vs -2.90% expected
- (GBP) CPI y/y 2.30% vs 2.30% expected
- China keeps short-term borrowing rates steady after Fed hike
- Senate passes stopgap funding to avert shutdown, sends to house
Markets Update:
Asian stock markets, led by Japan, are mostly lower on Thursday following the overnight sell-off on Wall Street after the U.S. Federal Reserve raised interest rates for the fourth time this year and also projected two rate hikes next year, with the central bank’s tone not as dovish as investors had hoped. Investors also remained cautious ahead of the Bank of Japan’s monetary policy decision due later in the day.
The mainland Chinese markets were lower by the end of the morning session, with the Shanghai composite slipping 0.5 percent and the Shenzhen composite trading flat. The Chinese central bank announced its decision to keep short-term borrowing rates steady on Thursday, a day after unveiling measures to encourage lending to small firms. Hong Kong’s Hang Seng index fell 1.2 percent , with Hong Kong-listed shares of HSBC declining by 0.86 percent.
The ASX 200 in Australia also saw losses as it traded down by 0.76 percent, as shares of the country’s so-called Big Four banks declined. Japan’s Nikkei 225 slipped more than 2.9 percent in afternoon trade while the Topix index declined by 2.7 percent.
The Fed raised key overnight lending rate rates by 0.25 percent point as expected to a range of 2.25 percent to 2.50 percent. U.S. junk bonds sold off sharply, with their ETFs falling 0.9 percent, the biggest decline since March 1. As investors flocked to the safety of government bonds, the 10-year U.S. Treasuries yield fell below its May 29 low of 2.759 percent to as low as 2.750 percent, a level last seen in early April. The two-year U.S. yield stood at 2.656 percent, just 0.097 percent less than the 10-year yield.
The dollar bounced back against major currencies after the Fed was perceived to be more hawkish than anticipated. China’s yuan weakened in early Asian trade after the country’s central bank left its short-term borrowing rates unchanged on Thursday, choosing not to follow its U.S. counterpart. On Thursday, Japan kept its policy settings unchanged, as expected.
Oil prices fell on Thursday to erase most of their gains from the day before, resuming declines seen earlier in the week amid worries about oversupply and the outlook for the global economy.
Upcoming Events:
- 10:30 AM GMT – (GBP) Retail Sales m/m
- 01:00 PM GMT – (GBP) MPC Official Bank Rate Votes
- 01:00 PM GMT – (GBP) Monetary Policy Summary
- 01:00 PM GMT – (GBP) Official Bank Rate
- &more…
