Global Markets:
- Asian Stock Markets : Nikkei down 0.82%, Shanghai Composite down 0.66%, Hang Seng down 0.58%, ASX down 0.18%
- Commodities : Gold at $1199.90 (+0.07%), Silver at $14.43 (-0.43%), Brent Oil at $81.58 (+0.98%), WTI Oil at $72.41 (+1.17%)
- Rates : US 10-year yield at 3.043, UK 10-year yield at 1.629, Germany 10-year yield at 0.488
News & Data:
- (NZD) Official Cash Rate 1.75% vs 1.75% expected
- (USD) Federal Funds Rate <2.25% vs <2.25% expected
- (USD) Crude Oil Inventories 1.9M vs -0.7M expected
- Italy's Government may postpone meeting over 2019 budget plan: Corriere
- US, Japan agree to negotiate a free trade agreement
Markets Update:
Asian stock markets are lower on Thursday after the U.S. Federal Reserve raised interest rates by 25 basis points as widely anticipated and projected one more rate hike by the end of the year. This is the Fed's third rate hike in 2018. In his subsequent press conference, Fed Chairman Jerome Powell said it is not in the central bank's forecasts to see inflation surprise to the upside.
The Nikkei 225 in Japan reversed course once again, losing its earlier gains to trade lower by 0.8 percent in the afternoon, despite the shipping industry advancing by 0.65 percent. In the Greater China region, Hong Kong's Hang Seng index was lower by 0.45 percent. The Hong Kong stock exchange saw another highly anticipated listing on Thursday with the public debut of investment bank China Renaissance. The Shanghai composite fell by 0.66 percent while the Shenzhen composite slid by around 0.6 percent. Down Under, the ASX 200 remained in negative territory by trading 0.2 percent lower, with Commonwealth Bank of Australia slipping further by 0.21 percent.
The 10-year U.S. Treasuries yield fell more than 5 basis points to 3.048 percent as market participants had been braced for a more hawkish stance. The fall in Treasury yields was good news for Asia and other emerging markets, which had been pressured by concerns that higher U.S. yields would encourage investors to move funds out of emerging markets to the United States, on top of worries over the Sino-U.S. trade feud.
In the currency market, the dollar was mixed after the Fed’s decision. The dollar index against a basket of six major currencies stood at 94.302, having gained 0.13 percent on Wednesday. Emerging market currencies were firmer, with MSCI’s emerging market currency index rising 0.2 percent on Wednesday and another 0.2 percent in Asia on Thursday. Oil prices gained on an impending fall in Iranian exports due to U.S. sanctions, which are set to be implemented in November.
Upcoming Events:
- 09:00 AM GMT – (EUR) M3 Money Supply y/y
- 01:30 PM GMT – (USD) Core Durable Goods Orders m/m
- 01:30 PM GMT – (USD) Final GDP q/q
- 01:30 PM GMT – (USD) Durable Goods Orders m/m
- 02:30 PM GMT – (EUR) ECB President Draghi Speaks
- 09:30 PM GMT – (USD) Fed Chair Powell Speaks
- 10:45 PM GMT – (CAD) BOC Gov Poloz Speaks
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