Global Markets:
- Asian Stock Markets : Nikkei up 1.72%, Shanghai Composite up 1.29%, Hang Seng up 2.43%, ASX up 1.12%
- Commodities : Gold at $1349.05 (-0.12%), Silver at $14.97 (-0.17%), Brent Oil at $62.26 (+0.19%), WTI Oil at $54.23 (+0.22%)
- Rates : US 10-year yield at 2.075, UK 10-year yield at 0.801, Germany 10-year yield at -0.314
News & Data:
- (JPY) Trade Balance -0.61T vs -0.80T expected
- (NZD) Current Account 0.68B vs 0.16B expected
- (AUD) CB Leading Index m/m 0.10% vs 0.40% previous
- (NZD) GDT Price Index -3.80% vs -3.40% previous
- (USD) Housing Starts 1.27M vs 1.24M expected
- (USD) Building Permits 1.29M vs 1.30M expected
- (CAD) Manufacturing Sales m/m -0.60% vs 0.60% expected
- (GBP) 10-y Bond Auction 0.89|2.1 vs 1.11|2.3 previous
- (EUR) ZEW Economic Sentiment -20.2 vs -3.6 expected
- (EUR) Trade Balance 15.3B vs 16.4B expected
- (EUR) Final Core CPI y/y 0.80% vs 0.80% expected
- (EUR) Final CPI y/y 1.20% vs 1.20% expected
- (EUR) German ZEW Economic Sentiment -21.1 vs -5.7 expected
- FOMC Preview: Powell Likely to Stay on Hold, Open the Door to a July Cut
- Japan exports slide for sixth month as trade troubles knock demand
Markets Update:
Asian markets surged Wednesday, following new hope on the trade front and strong gains on Wall Street. Markets also got a boost after the head of the European Central Bank, Mario Draghi, said the bank was ready to cut interest rates and provide additional economic stimulus if necessary.
The remarks put the spotlight on the U.S. Federal Reserve, which has its own decision on interest rates scheduled later in the day. Many think the U.S. central bank may be headed for its first interest rate cut in over a decade sometime later this year.
Hang Seng, Shenzhen indexes up more than 2% after Trump says he’ll meet with Xi at G-20. President Trump’s tweet was enough to rally Wall Street. Japan’s Nikkei gained 1.7%, despite data that showed exports in May fell for a sixth straight month. The Australian share market has surged by more than a percentage point to hit another 11-year high amid indications Chinese-US trade tensions could be easing.
Mainland Chinese stocks soared by the afternoon, as the Shanghai composite rose 1.5% following positive developments overnight on the U.S.-China trade front. All are trading at their highest levels since early May when Trump knocked global stock markets by ratcheting up tariff rates on imported Chinese goods.
Confidence among Asian companies is at its lowest since the 2008-09 financial crisis as the trade war disrupts global supply chains. The mood shift was clear in bond markets where German yields hit record lows deep in negative territory, while yields on the U.S. 10-year note reached the lowest since September 2017 at 2.016%, a world away from the 3.25% top touched in November last year.
The fallout in currencies was significantly less, in large part because it was hard for one to gain when all the major central banks were under pressure to ease. Reflation trades helped support oil prices, as did hopes for a thaw in Sino-U.S. tensions. Brent crude futures were up 15 cents at $62.29, while U.S. crude firmed 20 cents to $54.10 a barrel.
Upcoming Events:
- 09:30 AM GMT – (GBP) CPI y/y
- 09:30 AM GMT – (GBP) PPI Input m/m
- 01:30 PM GMT – (CAD) CPI m/m
- 01:30 PM GMT – (CAD) Common CPI y/y
- 01:30 PM GMT – (CAD) Median CPI y/y
- 01:30 PM GMT – (CAD) Trimmed CPI y/y
- 03:00 PM GMT – (EUR) ECB President Draghi Speaks
- 07:00 PM GMT – (USD) FOMC Economic Projections
- 07:00 PM GMT – (USD) FOMC Statement
- 07:00 PM GMT – (USD) Federal Funds Rate
- 07:30 PM GMT – (USD) FOMC Press Conference
- 11:45 PM GMT – (NZD) GDP q/q
- &more…
