_edited_edited.png)
Markets Update: Another negative day for equities with most indices down ~1%; RBNZ suggests a potential hike one year out; FOMC Minutes later today
Economic Calendar
Global Markets Roundup: 16 Aug 2023
The weakness in US stocks was echoed in Asia, where markets were also lower on Wednesday. The Nikkei 225 fell by 1.2%, the Hang Seng Index fell by 1.1%, and the Shanghai Composite Index fell by 0.8%.
US stocks closed lower on Tuesday, with the S&P 500 closing below its 50-day moving average for the first time since March. The sell-off was broad-based, with all 11 sectors of the S&P 500 closing in the red.
The decline was driven by concerns about the global economic outlook, as well as rising inflation and interest rates. Investors are worried that the Federal Reserve may be forced to raise interest rates more aggressively than expected in order to combat inflation, which could slow down economic growth.
European equity futures are pointing to a weaker open, with the Euro Stoxx 50 down 0.3% after the cash market closed down 1.0% yesterday. The weakness in European stocks is being driven by concerns about a global economic slowdown, as well as rising inflation and interest rates. Investors are worried that the European Central Bank (ECB) may be forced to raise interest rates more aggressively than expected in order to combat inflation, which could slow down economic growth.
RBNZ Holds Rates Unchanged
The Reserve Bank of New Zealand (RBNZ) kept interest rates unchanged at 2.0% on Wednesday, as expected. The RBNZ said that it expects to keep rates at a restrictive level for the foreseeable future in order to combat inflation.
The RBNZ's decision to hold rates unchanged was a surprise to some analysts, who had expected the central bank to raise rates by 25 basis points. However, the RBNZ said that it is still assessing the impact of the recent rise in inflation on the economy.
Currency Markets
The US dollar index (DXY) was a touch softer above 103 on Wednesday, as investors weighed the risks of a global economic slowdown against the potential for continued inflation. The euro (EUR) was supported by 1.09, the Japanese yen (JPY) maintained 145 status, and the New Zealand dollar (NZD) led post-RBNZ.
COMMODITIES
Crude futures were lacklustre as the risk-off mood offset the bullish private sector crude inventory data. The US Energy Information Administration (EIA) reported that crude oil inventories fell by 6.2 million barrels (mbbl) last week, compared to analysts' expectations for a decline of 2.3 mbbl.
However, the risk-off mood in the markets, driven by concerns about a global economic slowdown, weighed on crude prices. The euro (EUR) and the Japanese yen (JPY) strengthened against the US dollar (USD), making oil more expensive for buyers holding those currencies.
Woodside Energy (WDS AT) said that parties reached an in-principle agreement on a number of issues key to workforce related to its Australian LNG operation and that positive progress is being made. However, the Alliance union said that Woodside Energy is well off the pace on key bargaining issues.
Spot gold traded rangebound with a floor at the USD 1,900/oz level. The yellow metal was supported by the risk-off mood in the markets, but it was also weighed down by the strength of the USD.
Copper futures were stuck near the prior day's worst levels amid the ongoing China slowdown concerns. China is the world's largest consumer of copper, and a slowdown in its economy could lead to lower demand for the metal.
Looking Ahead
Key economic data releases to watch on Thursday include UK CPI, EZ GDP & Unemployment Rate, US Building Permits & Industrial Production, and FOMC Minutes.
Supply from Germany is also expected to be in focus on Thursday.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team