Global Markets:
- Asian Stock Markets : Nikkei down 0.62%, Shanghai Composite down 0.82%, Hang Seng down 0.81%, ASX down 1.35%
- Commodities : Gold at $1475.60 (+0.09%), Silver at $17.12 (-0.01%), Brent Oil at $60.73 (-0.30%), WTI Oil at $55.26 (-0.16%)
- Rates : US 10-year yield at 1.750, UK 10-year yield at 0.731, Germany 10-year yield at -0.340
News & Data:
- (USD) Building Permits 1.46M vs 1.39M expected
- (CAD) Manufacturing Sales m/m -0.20% vs -0.50% expected
- China cuts interest rate slightly in latest fine-tuning of economic stimulus
- UK PM Johnson: Says We Will Come Out Of The EU On Jan. 31
Markets Update:
Asian stock markets are mostly lower on Wednesday after U.S. President Donald Trump threatened higher tariffs on Chinese goods if a trade deal is not reached between the two economic powerhouses. News that the U.S. Senate passed legislation supporting protesters in Hong Kong also weighed on the markets. China has condemned the U.S. Senate measure.
Mainland Chinese stocks edged lower by the afternoon, with the Shanghai composite down 0.8% and Shenzhen component shedding 0.9%. Hong Kong’s Hang Seng index slipped 0.8%. Japan’s Nikkei 225 slipped 0.6% while the Topix index shed 0.3%. That came after Japanese merchandise trade data for October from the country’s Ministry of Finance showed exports for the month falling 9.2% year-on-year — well off the 7.6% year-on-year decline expected by economists in a Reuters poll. The S&P/ASX 200 in Australia declined 1.4% as the heavily-weighted financial subindex fell about 2%.
Yields on U.S. 10-year Treasuries dropped further to a two-week trough of 1.75%, with a marked flattening of the curve hinting at a possible return of recession fears. Investors now await minutes of the Federal Reserve’s last policy meeting where it cut interest rates and signalled a pause for the time being. The market has all but given up on the prospect of an easing in December, which is now priced at just 0.8%. A move in March is put at a probability of around 42%.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.884 after earlier dipping to levels below 97.8. The risk-off tone left spot gold a shade firmer
Upcoming Events:
- 01:30 PM GMT – (CAD) CPI m/m
- 01:30 PM GMT – (CAD) Common CPI y/y
- 01:30 PM GMT – (CAD) Median CPI y/y
- 01:30 PM GMT – (CAD) Trimmed CPI y/y
- 03:30 PM GMT – (USD) Crude Oil Inventories
- 07:00 PM GMT – (USD) FOMC Meeting Minutes
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