Global Markets:
- Asian Stock Markets : Nikkei down 1.41%, Shanghai Composite down 0.61%, Hang Seng down 2.28%, ASX down 1.64%
- Commodities : Gold at $1974.15 (-0.15%), Silver at $23.35 (+0.49%), Brent Oil at $73.34 (-0.50%), WTI Oil at $69.13 (-0.48%)
- Rates : US 10-year yield at 3.660, UK 10-year yield at 4.238, Germany 10-year yield at 2.265
News & Data:
- (USD) CB Consumer Confidence 102.3 vs 99.1 expected
- (EUR) Spanish Flash CPI y/y 3.20% vs 3.60% expected
- (CHF) GDP q/q 0.30% vs 0.10% expected
Markets Update:
Investors in Asian markets were on edge on Wednesday, following a lackluster session on Wall Street overnight, as they awaited the outcome of a US debt ceiling deal that could face resistance from some Republicans. The deal, which would lift the borrowing limit for two years and keep non-defense spending flat for fiscal 2024 and slightly up for fiscal 2025, is yet to be approved by the House and the Senate, where it could encounter delays or changes.
The Australian S&P/ASX 200 index fell sharply below the 7,200 level, led by losses in energy and mining stocks amid declining commodity prices. The Japanese Nikkei 225 index also plunged well below the 30,000 mark, ending a four-day winning streak, as traders took profits after the recent surge. The market ignored some mixed data on retail sales and industrial production. In China, blue chip stocks hit their lowest level since 2023 and government bonds gained. Hong Kong’s Hang Seng index dived more than 20% from its January high, when optimism about a reopening rally was strong.
Oil prices also dropped on Tuesday, pressured by concerns about China’s economic recovery and uncertainty over the US debt deal. Treasuries rose after the initial agreement was announced, on expectations that a US default would be averted, but the market remained skittish as the Treasury is likely to issue more debt once allowed to borrow. The dollar rose in anticipation of higher yields and stronger US data compared to Europe.
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
