With US and UK markets closing on public holidays, equity futures climbed higher on Wall Street in thin liquidities. The US debt deal is facing voting hurdles in Congress due to disagreement from some far-right Republican lawmakers, though both President Biden and House Speaker Kevin McCarthy expressed confidence for the bill to pass. The US treasury yields fell slightly, suggesting markets still held optimism toward the debt deal, while the tech-heavy index, Nasdaq’s futures continued to outperform Dow and S&P 500, in a sign of an extensive rally in tech stocks ahead of a slew of major software company’s earnings, such as HP, Salesforce, and Broadcom later this week.
Given a strengthened US dollar, commodities had a muted session, extending last Friday’s movements, with gold drifting lower and oil inching higher as traders were awaiting more clues from the US debt bill progress and China’s upcoming manufacturing PMIs on Wednesday.
In Asia, most equity markets finished higher on Monday as the tentative debt deal lifted risk sentiment. However, the Chinese markets extended a four-day losing streak on the country’s faltering economic recovery. Hang Seng Index fell to the lowest level in 6 months, while the Chinese Yuan weakened by 5.6% against the US dollar year-to-date.
Asian markets are set to open lower, with ASX 200 futures down 0.18%, the Hang Seng Index futures down 0.93%, and Nikkei 225 up 0.06%.
Price movers:
- The Euro Stoxx 50 slipped 0.4%, with 11 out of 12 sectors finishing lower. The information technology and financials sectors led losses, both down 0.6%, while the communication services inched higher.
- By contrast, Japanese markets are hovering around decades-highs, with the benchmark index, Nikkei 225 up 1% to 32,233.54, the highest seen in June 1990. Notably, the communication services sector outperformed, up 3.47%. Softbank’s shares jumped 8% amid the AI chipmakers’ euphoria on Wall Street.
- The Hang Seng China Enterprises Index fell 1.3% and 19.7% from the peak in January, approaching a bear market amid China’s economic uncertainties and intensified US-China geopolitical tensions. Most Chinese tech shares slipped following the recent tepid earnings reports, with Meituan leading losses, down 8.4% to the lowest since March 2022.
- The Turkish lira hit a record against the US dollar after Tayyip Erdogan won the presidential election for the third term. President Erdogan has been insisting on low-interest rates, despite the country’s skyrocketed inflation, which controverts the prevailing economic policy stance.
ASX and NZX announcements/news:
- No major announcements.
Today’s agenda:
- New Zealand Building consents for April. m/m
- Japanese April unemployment rate.
- Australian building approvals. m/m
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
