The US Dollar sagged to a 2-month low and stock markets traded mixed overnight as markets wait for the key US inflation report. Wall Street had a modest bid, supported by hopes for a bounce from China from more stimulus, as well as by a surge in Activision Blizzard (+10.02%) after a ruling that will allow Microsoft’s $69 bln takeover to go through. Japan’s household inflation expectations rose, keeping pressure on the BOJ. RBNZ left rates on hold, as expected. New Zealand’s central bank kept the Official Cash Rate unchanged at 5.5% but suggested that rates are sufficiently restrictive to bring inflation back to target by the second half of next year. The RBA announced changes to its meeting schedule from next year but remains on course for additional tightening. The Bank of England stated today that the UK economy was proving resilient to the risks posed by higher interest rates, although it would take time for the full impact to feed through.
- FX – The USDIndex slipped to 101. USDJPY broke 50-DMA and drifted to 139.30 indicating a potential downtrend. GBP breached 15-month resistance at 1.2968 and EUR at 1.1036.
- Stocks – The US500 was up 0.24% and the US100 was up 0.18%. ASX lifted 0.4%, Hang Seng lifted 0.9%, and CSI300 corrected -0.5% overnight. Tencent’s shares gained 1.8% and Alibaba’s shares jumped 1.86% in the Hong Kong market. China’s state planner on Wednesday praised Tencent and Alibaba in a statement detailing a study it had done on platform firms, in the latest sign authorities are warming up to the technology sector after a nearly three-year crackdown. Activision Blizzard +10.02%.
- Commodities – USOil remains supported as supply restrictions start to bite, at $74.96.
- Gold – broke 2-month down channel and extended to $1941.
Today – US Inflation, BOC Rate decision and Conference, and lots of Fedspeeches.
Biggest Mover @ (06:30 GMT) USDJPY (-0.54%) dipped to 139.30. Fast MAs flattened but MACD lines are negatively configured with RSI at 35.
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Andria Pichidi
Market Analyst
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