Monday Morning Coffee -Markets Update -02 Oct 2023-US House and Senate Pass Short-Term Spending Bill
Markets Update: US House and Senate Pass Short-Term Spending Bill; APAC Stocks Mixed on Holiday-Quietened Trading; European Equities Expected to Open Flat; US Dollar Flat, Antipodeans Lag.
Global Markets Roundup: 02 Oct 2023
The US House and Senate passed a short-term spending bill on Monday to keep the government funded until November 14th, avoiding a shutdown. APAC stocks traded mixed on Monday in severely holiday-quietened conditions amid the mass closures in the region. European equity futures are indicative of a contained open on Monday, with the Euro Stoxx 50 future flat after the cash market closed up 0.3% on Friday. The US dollar index (DXY) is flat and in tight parameters on Monday, with the Australian dollar (AUD) and Japanese yen (JPY) lagging. USD/JPY printed an 11-month high on Friday.
The ASX 200 was lacklustre on Monday, with many domestic participants absent in observance of Labour Day in Australia's most populous state of New South Wales and ahead of tomorrow's RBA meeting, which is the first under Governor Bullock's tenure.
The Nikkei 225 opened above 32,000 on Monday, boosted by a weaker currency and an encouraging Tankan survey, which showed large manufacturers' sentiment at its highest since June last year and non-manufacturing at its highest in over three decades. However, the index later pared most of the gains and eventually slipped back beneath the aforementioned key level.
The Hang Seng and Shanghai Composite markets were closed on Monday, alongside closures in South Korea and India, with mainland China away the entire week for the National Day Golden Week celebrations.
FX DXY was unchanged despite the US averting a government shutdown after Congress passed a last-minute 45-day continuing resolution that effectively kicks the can down the road, while the attention for the greenback turns to the ISM Manufacturing PMI data and upcoming Fed speakers including Powell. EUR/USD traded uneventfully after last week’s failure to sustain the 1.0600 status. GBP/USD languished beneath the 1.2200 handle in the absence of any immediate catalysts. USD/JPY printed an 11-month high as it continues to test the government’s resolve and with the BoJ Summary of Opinions not providing anything to suggest a tweak this year. AUD and NZD were subdued ahead of the RBA and RBNZ central bank meetings in which both are expected to keep their rates unchanged although money markets are leaning towards another rate hike by the former before year-end.
FIXED INCOME
10yr UST futures were marginally pressured amid gains in yields after the US averted a government shutdown whereby additional aid for Ukraine was removed from the bill to pass Congress. Bund futures traded slightly lower as prices eased back following Friday’s firm rebound. 10yr JGB futures softened in tandem with the pressure in global counterparts and following the mostly encouraging BoJ Tankan survey, but were briefly supported after the BoJ announced to conduct purchases of 5yr-10yr bonds on top of its scheduled buying on Wednesday.
COMMODITIES
Crude futures were rangebound in holiday-quietened trade and following the mixed Chinese PMI data, while OPEC+ sources recently noted an unlikelihood for any tweaks at Wednesday's JMMC meeting. OPEC+ ministerial panel unlikely to recommend output policy change at October 4th meeting, according to Reuters sources on Friday. Iraq’s September oil exports averaged 3.4mln bpd and oil prices averaged USD 92.05/bbl.
Spot gold marginally extended on six-month lows after trickling below USD 1850/oz. Copper futures traded sideways amid the mixed risk appetite and absence of its largest buyer. Five more cargo ships were reportedly headed towards Ukrainian Black Sea ports for further grain exports, according to Ukraine’s Deputy PM.
领英推荐
Key Economic Data and Events to Watch
UK Nationwide house prices
Spanish, Italian, German, French, eurozone, UK, and US PMIs
US ISM manufacturing
Riksbank minutes
Fed's Powell and Williams speeches
Supply from Italy
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team