Tuesday 7th January: Asian markets higher as investors re-assess Middle East tensions

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Global Markets:

  • Asian Stock Markets : Nikkei up 1.60%, Shanghai Composite up 0.60%, Hang Seng up 0.49%, ASX up 1.35%
  • Commodities : Gold at $1568.95 (+0.01%), Silver at $18.23 (+0.30%), Brent Oil at $68.28 (-0.91%), WTI Oil at $62.74 (-0.84%)
  • Rates : US 10-year yield at 1.816, UK 10-year yield at 0.772, Germany 10-year yield at -0.279

News & Data:

  • (JPY) Monetary Base y/y 3.20% vs 3.60% expected
  • (USD) Final Services PMI 52.8 vs 52.2 expected
  • (CAD) IPPI m/m 0.10% vs 0.40% expected
  • (CAD) RMPI m/m 1.50% vs 1.50% expected
  • (EUR) PPI m/m 0.20% vs 0.10% expected
  • (GBP) Final Services PMI 50 vs 49.1 expected
  • (EUR) Sentix Investor Confidence 7.6 vs 3 expected
  • (EUR) Final Services PMI 52.8 vs 52.4 expected
  • (EUR) German Final Services PMI 52.9 vs 52 expected
  • (EUR) French Final Services PMI 52.4 vs 52.4 expected
  • (EUR) Italian Services PMI 51.1 vs 50.9 expected
  • (EUR) Spanish Services PMI 54.9 vs 53.9 expected
  • (EUR) German Retail Sales m/m 2.10% vs 1.10% expected
  • China’s refusal to lift grain quotas make Trump’s phase one import demands ‘more difficult’

Markets Update:

Asian stock markets are mostly higher on Tuesday following the overnight recovery on Wall Street and as no fresh escalation in tensions were reported from the Middle East. Investors are optimistic that the geopolitical tensions will not have a major impact on the global economy. Crude oil and gold prices retreated after strong gains in the overnight session.

The Japanese market is rising after U.S. stocks closed higher overnight and the safe-haven yen weakened. The Nikkei 225 jumped 1.6%, after a decline of nearly 2% on Monday. The Topix index rose also rose 1.6%. Chinese stocks were also in positive territory. The Shanghai composite was up 0.6%, while the Shenzhen composite jumped 1%. South Korea’s Kospi was up 0.9%, led by the tech and cosmetics sectors. Hong Kong’s Hang Seng index rose 0.50%. Australia’s S&P/ASX 200 jumped around 1.4%.

Meanwhile, bushfires are set to affect the country’s major dairy industry, with fire-affected regions accounting for around a third of Australia’s output, according to a Reuters report. Australia is the world’s seventh-largest dairy exporter.

Oil surrendered hefty gains as some speculated Iran would be unlikely to strike against the U.S. in a way that would disrupt supplies, and its own crude exports. The U.S. dollar index, which tracks the greenback against a basket of its peers, was last at 96.660, retreating from levels above 97.1 last week.

Upcoming Events:

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  • 10:00 AM GMT – (EUR) CPI Flash Estimate y/y
  • 01:30 PM GMT – (CAD) Trade Balance
  • 03:00 PM GMT – (USD) ISM Non-Manufacturing PMI
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