Global Markets:
- Asian Stock Markets : Nikkei down 0.61%, Shanghai Composite down 0.98%, Hang Seng down 0.27%, ASX up 0.49%
- Commodities: Gold at $1429.80 (+1.55%), Silver at $15.38 (+0.90%), Brent Oil at $62.54 (+0.22%), WTI Oil at $56.39 (+0.25%)
- Rates : US 10-year yield at 1.950, UK 10-year yield at 0.728, Germany 10-year yield at -0.386
News & Data:
- (AUD) Trade Balance 5.75B vs 5.25B expected
- (AUD) Building Approvals m/m 0.70% vs 0.00% expected
- (AUD) Cash Rate 1.00% vs 1.00% expected
- US 10-year Treasury yield slumps to Nov. 2016 low as global growth fears take hold
- US dollar struggles as U.S. yields fall, dovish BoE weighs on pound
Markets Update:
Asian markets fell in morning trade on Wednesday as initial enthusiasm over the latest U.S.-China trade truce was overtaken by fresh concerns over Washington’s threat of tariffs on additional European goods. While the threat of new U.S. tariffs has been postponed for now, existing tariffs that have disrupted global supply chains are unlikely to be lifted any time soon.
Global growth concerns also weighed on investor confidence, with South Korea the latest trade-reliant economy to cut its economic growth and export targets, a day after weaker factory readings worldwide.
The rally in global stocks following the U.S.-China summit at weekend is rapidly losing steam. China’s Shanghai Composite is trading down by nearly 1% while Hong Kong’s Hang Seng Index fell 0.3%. Japan’s Nikkei 225 dropped 0.6% amid a stronger yen. The Japanese currency received some support after the Bank of Japan made small tweaks to its bond-buying program. On the other hand, Australia’s ASX gained 0.5% supported by consumer and commodity stocks, after Australia’s trade surplus is reported to have hit record high in May 2019.
Global bond yields are also hitting new lows as investors bet on further monetary easing around the world amid faltering global growth. Trump has made it clear that Fed rate cuts are preferred, leading to stronger speculations.
The 10-year yield fell below two percent to go as low as 1.95%, a low last seen in November 2016. In the currency market the Euro was steadier at $1.1291 while the dollar traded at 107.87 yen, off Monday’s high of 108.535 hit after China and the United States agreed to resume trade talks.
Oil prices rose a tad on Wednesday after a steep fall in the previous session, as data showed U.S. crude inventories fell more than expected last week but remained wobbly after four-percent dives on Tuesday even after OPEC and allies including Russia agreed to extend supply cuts until next March.
Gold continued to see strong gains as Asian markets opened on Wednesday with the metal gaining more than 1% on the day and trading near the $1,430 an ounce level on increased demand and risk-off sentiment. The safe-haven metal is seeing renewed demand from traders and investors as their overall risk appetite is less robust than that which was seen on Monday.
Upcoming Events:
- 9:30am GMT – (GBP) Services PMI
- 1:15pm GMT – (GBP) MPC Member Broadbent Speaks
- 1:15pm GMT – (USD) ADP Non-Farm Employment Change
- 1:30pm GMT – (CAD) Trade Balance
- 3:00pm GMT – (USD) ISM Non-Manufacturing PMI
- &more…
