US Session Update: Asian markets reel as China stocks drop pre-Fed decision, US indexes surge
Global Markets:
- Asian Stock Markets : Nikkei up 0.25%, Shanghai Composite down 1.12%, Hang Seng down1.48% ASX up 0.31%
- Commodities : Gold at $1989.5 (-0.17%), Silver at $22.930 (-0.34%), Brent Oil at $72.56 (-0.82%), WTI Oil at $68.07 (-0.83%)
- Rates : US 10-year yield at 4.206, UK 10-year yield at 3.994, Germany 10-year yield at 2.220
News & Data:
- (USD) Core CPI m/m 0.3% vs 0.3% expected
- (USD) CPI m/m 0.1% vs 0.0% expected
- (USD) CPI y/y 3.1% vs 3.0% expected
Markets Update:
China’s stock market faced a downturn as investors processed Beijing’s plans to stimulate domestic demand just ahead of the U.S. Federal Reserve’s impending interest rate decision. The mainland Chinese CSI 300 index plummeted by over 1.3% following China’s commitment to boosting internal demand, prioritizing strategic sector development, and tackling the real estate crisis after a pivotal meeting outlining economic priorities for 2024. BofA Global Research noted that Beijing’s outlined measures largely aligned with market predictions, expecting no aggressive fiscal expansions or rate cuts.
Anticipation surrounded the Federal Reserve’s upcoming policy statement, expected to maintain its benchmark overnight borrowing rate within the 5.25%-5.5% range. Australia’s S&P/ASX 200 climbed by 0.31%, closing at 7,257.8, marking its highest point in four months. Japan’s Nikkei 225 advanced by 0.33%, and the Topix saw a rise of 0.13%. Conversely, South Korea’s Kospi fell by 0.94%, and the smaller Kosdaq slid by 1.14%. Hong Kong’s Hang Seng index experienced a 1.08% decline following its leading gains in Asia the previous day.
In the U.S., all major indexes recorded gains for a fourth consecutive day following the expected 3.1% year-on-year increase in the consumer price index. The Nasdaq Composite and Dow Jones Industrial Average reached their highest levels since April and January of the preceding year. The S&P 500 rose by 0.46%, the Dow gained 0.48%, and the Nasdaq Composite advanced by 0.70%.
Upcoming Events:
- 1:30 PM GMT – USD Core PPI m/m
- 1:30 PM GMT – USD PPI m/m
- 7:00 PM GMT – USD Federal Funds Rate
- 7:00 PM GMT – USD FOMC Economic Projections
- 7:00 PM GMT – USD FOMC Statement
- 7:30 PM GMT – USD FOMC Press Conference