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20/06/2023

Today’s Announcements & News

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Asia-Pacific markets showed a mixed performance on Tuesday, with investors closely monitoring China’s loan prime rate decision following recent key lending rate cuts by the central bank.

Expectations are widespread for cuts to China’s 1-year and 5-year loan prime rates, with economists surveyed by Reuters anticipating a 10-basis point cut and a 15-basis point cut, respectively.

In Australia, the S&P/ASX 200 rose 0.24%, building on gains from the previous day, ahead of the release of the Reserve Bank of Australia’s minutes for its June meeting later today.

Meanwhile, in Japan, the Nikkei 225 retreated from its 33-year highs, declining by 0.45%, while the Topix fell 0.58%.

South Korea’s Kospi and the Kosdaq continued their slide from Monday, with losses of 0.35% and 0.37%, respectively.

The Hang Seng index in Hong Kong is expected to open largely unchanged, with futures at 19,913 compared to the previous close of 19,912.89.

United States

On Monday evening, stock futures showed a slight decline as investors anticipated a shortened trading week.

Futures linked to the Dow Jones Industrial Average slipped 93 points, equivalent to 0.3%, while S&P 500 futures pulled back 0.2%. Nasdaq 100 futures experienced a decline of 0.18%.

The regular trading session was closed on Monday due to the observance of the Juneteenth holiday.

Despite a slight dip on Friday, investors enjoyed a strong week, with the S&P 500 and Nasdaq Composite recording their best weekly performances since March. The S&P 500 rose by 2.6%, and the Nasdaq Composite gained 3.25%. This marked the fifth consecutive positive week for the S&P 500 and the eighth consecutive positive week for the Nasdaq Composite, a feat previously accomplished in 2019.

Investors reacted positively to the Federal Reserve’s decision to forgo a rate hike in June. Fed Chairman Jerome Powell stated during a press conference that the central bank has not yet determined its policy ahead of the July meeting. However, policymakers anticipate two more quarter-point rate increases later this year. The decision to skip a hike in June ended the Fed’s streak of ten consecutive interest rate increases.

While Powell emphasized the data-dependent nature of future Fed policy, the stock market has shown an upward trend. Investors are monitoring how the positive market sentiment from last week will fare in a shortened trading week with limited economic data. On Tuesday morning, housing starts data will be released.

New York Fed President John Williams is scheduled to appear at a corporate governance event in New York City on Tuesday, alongside Fed Vice Chair for Supervision Michael Barr. Fed Chair Powell is set to testify before Congress on Wednesday and Thursday.

Investors will also be watching for the quarterly report from shipping giant FedEx, which is expected after the closing bell on Tuesday.

Commodity

On Monday, global oil prices experienced a decline of over $1, reversing last week’s gains. Concerns regarding China’s economy overshadowed the positive impact of OPEC+ output cuts and the continued decrease in the number of operating oil and gas rigs in the United States.

Brent crude dropped $1.15, equivalent to 1.5%, and traded at $75.46 per barrel at 0350 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude fell $1.09, or 1.5%, to $70.69.

In the previous week, Brent recorded a gain of 2.4% and WTI rose by 2.3%.

Gold prices experienced a slight decline in light trading on Monday, influenced by a stronger dollar. Investors assessed the future path of interest rates following hawkish statements made by U.S. Federal Reserve policymakers.

Spot gold decreased by 0.1% and reached $1,955.79 per ounce as of 0433 GMT. U.S. gold futures were down by 0.2% at $1,967.20.

The dollar index showed a slight increase, making gold less attractive to buyers holding other currencies.

The above analysis is only for the views of market researchers and is for reference only and is not regarded as a specific investment suggestion.

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