Stock markets have stabilised and mostly moved higher overnight, after a largely stronger close on Wall Street. Markets continue to assess the impact of the Israel-Hamas war, but the JPN225 rallied 2.4% on its return from the extended holiday weekend. General uncertainties and fears of an escalation of the conflict weighed on sentiment but strength in defensive shares helped support. European futures are higher, with indexes set to pare yesterday’s losses. US futures are narrowly mixed. Treasuries rallied in catch up trade and the US 10-year rate has corrected -14.6 bp to 4.66%. Treasuries jumped and shares advanced after comments by Federal Reserve officials fueled speculation the US central bank may stand pat until year-end.
Oil prices as well as Gold benefited from a spike in risk aversion prompted by the escalating conflict in the Middle East. Gas prices also spiked as investors weigh the risk of widening geopolitical tensions.
- USDIndex has lifted to 105.95, after correcting on dovish leaning Fed comments yesterday. The USDJPY recovered to 148.92 from 148.16 lows.
- China: The largest private real estate developer, Country Garden, said it might not be able to meet all of its offshore payment obligations when due or within the relevant grace periods. Meanwhile, Kaisa Group said creditors would get less than 5% of their money back if it is forced into liquidation.
- Stocks: JPN225 rallied 2.4%, while Hang Seng and ASX also moved higher.
- Oil: USOil has come down and is currently trading at $84.17 per barrel.
- Gold ended at $1861, the highest since late September, from a low of $1844.25.
- Today: BOE releases minutes of financial policy meeting & ECB President Christine Lagarde participates in session at IMF/World Bank meeting.
Interesting Mover: AUDUSD has breached the 61.8% fib. resistance line, indicating a potential move to 0.6471 if there is a confirmation of a breakout. Currently it is in correction mode.
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Andria Pichidi
Market Analyst
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