Global Markets:
- Asian Stock Markets : Nikkei down 0.49%, Shanghai Composite up 0.22%, Hang Seng down 0.32%, ASX up 0.35%
- Commodities : Gold at $1705.15 (-0.10%), Silver at $15.64 (-0.46%), Brent Oil at $29.18 (-2.67%), WTI Oil at $25.38 (-1.55%)
- Rates : US 10-year yield at 0.661, UK 10-year yield at 0.219, Germany 10-year yield at -0.536
News & Data:
- (NZD) Official Cash Rate 0.25% vs 0.25% expected
- (AUD) Wage Price Index q/q 0.50% vs 0.50% expected
- (USD) Core CPI m/m -0.40% vs -0.20% expected
- (USD) CPI m/m -0.80% vs -0.70% expected
- (AUD) NAB Business Confidence -46 vs -65 previous
Markets Update:
Asian stock markets are mostly lower on Wednesday following the negative cues overnight from Wall Street amid fears the easing of lockdown restrictions around the world will lead to a second wave of coronavirus infections.
Worries about U.S.-China tensions also weighed on the markets after a leading U.S. Republican senator proposed a legislation that would authorize President Donald Trump to impose sanctions on China if it did not provide a full account of the events leading to the coronavirus outbreak.
In Japan, the Nikkei 225 declined 0.5%. The S&P/ASX 200 in Australia added 0.35% in its final hour after trading lower throughout the day. Mainland Chinese stocks nudged higher on the day, with the Shanghai composite up 0.2% while the Shenzhen composite added 0.6%. Hong Kong’s Hang Seng index traded lower by 0.3%.
The U.S. dollar nursed losses as traders braced for Powell’s speech, which will cover economic issues and may offer a hint whether negative rates are a viable policy option. Trump on Tuesday again pushed the Fed to adopt negative interest rates, a hot topic in financial markets since last week when U.S. money market instruments started to price in a chance of negative rates.
U.S. consumer prices dropped 0.8% in April, the biggest since the Great Recession, raising the spectre of deflation. Oil futures fell in Asia as worries about the virus overcame hope that output cuts will put a floor under prices.
Upcoming Events:
- Tentative – (NZD) RBNZ Press Conference
- 06:00 AM GMT – (GBP) Prelim GDP q/q
- 06:00 AM GMT – (GBP) GDP m/m
- 06:00 AM GMT – (GBP) Manufacturing Production m/m
- 12:30 PM GMT – (USD) Core PPI m/m
- 12:30 PM GMT – (USD) PPI m/m
- 01:00 PM GMT – (USD) Fed Chair Powell Speaks