Global Markets:
- Asian stock markets: Nikkei up 0.32%, Hang Seng up 1.25%, ASX up 0.05%
- Commodities: Gold at $1329.5 (-0.12%), Silver at $16.380 (-0.35%), WTI Oil at $61.16 (-1.02%), Brent Oil at $64.72 (-0.81%)
- Rates: US 10-year yield at 2.888, UK 10-year yield at 1.579, German 10-year yield at 0.734
News & Data:
- (AUD) Wage Price Index q/q 0.60% vs 0.50% expected
- (AUD) Construction Work Done q/q -19.40% vs -9.80% expected
- (NZD) GDT Price Index -0.50% vs 5.90% previous
- (EUR) German ZEW Economic Sentiment 17.8 vs 16 expected
- Walmart just saw $30 billion in market cap destroyed by Amazon fears
- BOJ's Funo: No Need To Be Pessimistic On Economy Takes Time For Productivity To Improve
Markets Update:
Asian markets traded higher on Wednesday. While they opened in the red, following weakness on the Wall Street, they quickly reversed to trade in the green. Investors were seen to be factoring Japanese exporters, as the USD continues to gain against the yen.
ASX had a day of mixed earnings, with BHP’s miss responsible for the subdued gains. Tech stocks have been leading from the front, both on Nikkei and Hang Seng.
US Treasury yields edged higher to near 4 year highs, as there has been indication that government borrowing is set to increase. Deficits are expected to increase, following last year’s tax overhaul, and the budget deal set to increase federal spending over the next two years.
The higher yields are feeding into market instability, as investors worry about a faster pace of rate hikes than originally believed. Market instability is most likely to persist until the Fed’s policy meeting in March, when clarity on the same is expected.
Driven by higher yields, the US Dollar index bounced back 0.7% this week from last week’s three year low. The stronger dollar has weighed in on commodities, with both Brent and WTI Crude losing more than half a percent. Gold is at a one-week trough, also under pressure by the rising bond yields.
Bitcoin continued to trade around 11000, up 86% from this month’s lows.
Upcoming Events:
- 08:00 AM GMT – (EUR) French Flash Manufacturing PMI
- 08:00 AM GMT – (EUR) French Flash Services PMI
- 08:30 AM GMT – (EUR) German Flash Manufacturing PMI
- 08:30 AM GMT – (EUR) German Flash Services PMI
- 09:00 AM GMT – (EUR) Flash Manufacturing PMI
- 09:00 AM GMT – (EUR) Flash Services PMI
- 09:30 AM GMT – (GBP) Average Earnings Index 3m/y
- 09:30 AM GMT – (GBP) Claimant Count Change
- 09:30 AM GMT – (GBP) Public Sector Net Borrowing
- 09:30 AM GMT – (GBP) Unemployment Rate
- 02:15 PM GMT – (GBP) Inflation Report Hearings
- 03:00 PM GMT – (USD) Existing Home Sales
- 07:00 PM GMT – (USD) FOMC Meeting Minutes
- &more…
