Global Markets:
- Asian Stock Markets : Hang Seng down 1.51%, ASX down 0.96%
- Commodities : Gold at $2027.35 (+0.20%), Silver at $25.61 (-0.04%), Brent Oil at $75.42 (+0.13%), WTI Oil at $71.64 (-0.03%)
- Rates : US 10-year yield at 3.413, UK 10-year yield at 3.693, Germany 10-year yield at 2.254
News & Data:
- (NZD) Unemployment Rate 3.40% vs 3.50% expected
- (NZD) Employment Change q/q 0.80% vs 0.50% expected
- (USD) JOLTS Job Openings 9.59M vs 9.74M expected
- (EUR) Core CPI Flash Estimate y/y 5.60% vs 5.60% expected
- (EUR) CPI Flash Estimate y/y 7.00% vs 7.00% expected
- (AUD) Cash Rate 3.85% vs 3.60% expected
Markets Update:
Asian stock markets declined on Wednesday, tracking losses on Wall Street as shares of beleaguered banks tumbled again and worries about the economy deepened. Investors were also cautious ahead of a decision on interest rates by the Federal Reserve, which is widely expected to raise its key rate by a quarter percentage point to 5%-5.25% to try to finally tamp down inflation.
The Hang Seng index in Hong Kong lost 1.6% to 19,608.54, shrugging off the strong opening after the long weekend. South Korea’s Kospi shed 0.9% to 2,500.50 and the S&P/ASX 200 in Sydney declined 1.1% to 7,184.90. India’s Sensex lost 0.4% and shares also fell in Taiwan and Southeast Asia. Markets in Japan and China were closed for holidays.
The sell-off in Asian markets was driven by the slump in the U.S. banking sector, which has been under heavy scrutiny as the banking system cracks under the weight of much higher interest rates. Three of the four largest U.S. bank failures in history have come since March, and investors are wondering who will be the buyer when the next regional lender falters.
Adding to the gloom, a report showed U.S. employers advertised the fewest job openings in nearly two years during March. The job market has been one of the main pillars supporting a slowing economy, and a drop-off there would likely mean a recession.
Meanwhile, a political stalemate has left the U.S. edging ever closer to what would be a catastrophic default on government debt. President Joe Biden invited the top four congressional leaders to face-to-face talks at the White House next week to try to resolve the problem.
In commodities, crude oil saw another 5% plunge lower, while gold rallied above $2000 again on risk-off sentiment. The U.S. dollar was mixed against other major currencies, with yen gaining but AUD paring some of the post-RBA gains while NZD was wobbly after hawkish Q1 employment report.
Upcoming Events:
- 12:15 PM GMT – (USD) ADP Non-Farm Employment Change
- 02:00 PM GMT – (USD) ISM Services PMI
- 06:00 PM GMT – (USD) FOMC Statement
- 06:00 PM GMT – (USD) Federal Funds Rate
- 06:30 PM GMT – (USD) FOMC Press Conference
