Thursday Morning Coffee - Markets Update - 13 Apr 2023 - Markets lower in the aftermath of US CPI and FOMC
Market Update: Markets lower in the aftermath of US CPI and FOMC.
Thu, 13 Apr 2023 08:52 CEST
Today's important market events:
Asia Pacific (APAC) stock market started lower but eventually traded mixed as investors considered the latest US Consumer Price Index (CPI) report and Wall Street losses. The Federal Open Market Committee (FOMC) Minutes suggested that some participants discussed the possibility of leaving interest rates unchanged at the meeting.
The US Dollar Index (DXY) traded within the range of 101.44 and 101.50, while the EUR/USD failed to surpass the resistance level of 1.1000. In Europe, the equity futures indicate a mixed opening, with the Euro Stoxx 50 futures up 0.2% following LVMH's earnings report, and cash markets closing flat on Wednesday.
North Korea fired an unspecified ballistic missile towards the East Sea, and reports suggest that it might be a new weapon system or an Intercontinental Ballistic Missile (ICBM).
The ASX 200 index experienced losses despite gains in the Energy and Gold sectors, as losses in the Tech and Healthcare sectors offset those gains. The Nikkei 225 briefly dipped below 28k but trimmed losses, as the Japanese government warned of a potential North Korean missile landing in the Southwestern region of Hokkaido.
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The Hang Seng and Shanghai Comp opened lower but trimmed losses, with Hong Kong underperforming as Alibaba slumped over 4.5% after Softbank reportedly moved to sell almost all of its remaining stake in Alibaba. US equity futures tilted higher but were contained by a cautious mood.
European equity futures clambered off worst levels and are indicative of a mixed open. The DXY traded on either side of 101.50, while EUR/USD failed to breach 1.1000 to the upside. The GBP/USD met resistance near yesterday's high just before the 1.2500 level.
The AUD rose up the G10 ranks after a healthy Aussie labour market report, while the KRW gained against the USD after the BoK confirmed an FX swap deal with National Pension Fund for a maximum of USD 35bln.
Crude futures consolidated overnight, while spot gold remained in a tight range above USD 2,015/oz.
Looking ahead, the day's highlights include the release of German Final CPI, UK GDP Estimate, EZ Industrial Production, US PPI, and US IJC. There will also be speeches from Bank of Canada's Macklem and Bank of England's Pill, as well as supply from the UK, Italy, and the US. Additionally, the OPEC Monthly Oil Market Report (MOMR) will be published.