A Wild Ride For Asia-Pacific Market, Brexit Deal Reached, US Rebound Advances

European markets were up on stronger than expected earnings. The US equities market was indicated to open higher on Thursday morning.
Thomas Hughes
US markets

Asian Markets Close Mixed

The Asian markets kicked off the new month with a wild ride. Indices in Japan and Hong Kong both moved more than 1.0% in Thursday trading is in different directions. The Japanese Nikkei was weighed down by the tech sector which is suffering from earnings outlook while the Chinese market was supported by better than expected manufacturing data.

On the earnings front, shares of conglomerate Softbank fell more than -8.0% on news one of its rivals was lowering fees while Panasonic shed more than 5.5%. On the economic front, the Caixin PMI came in at 50.1 versus the expected 49.9 and is a dubious sign of expansion within China’s economy.

Other indices in the region were mixed but closed closer to break-even than the Nikkei or Heng Seng. The Shang Hai Composite and Australian ASX both advanced about 0.15% while the Korean Kospi fell -0.26%.

Europe Up On Earnings, Brexit Deal Reach

European markets were up on stronger than expected earnings. The move was led by Germany which saw its DAX index up more than 0.60% at mid-day. The Telecom sector was today’s star after BT reported better than expected revenue and EPS and raised its full-year guidance. Shares of that stock rose more than 10%. Other indices in the region were positive, but gains were less robust than in Germany. The FTSE 100 was trading about 0.12% higher at midday followed by a 0.06% increase for the French CAC.

The UK market was hampered in part by news on two fronts. On the one side word from Brussels is the UK and EU have reached a deal-in-part for the Brexit. The deal covers the financial services sector, sector that has been one of the major sticking points for negotiators to date. The news helped smooth the way for a broader agreement and relieved some fear inspired by Mario Draghi when he commented to the effect no Brexit deal is a de facto hard Brexit.

The second news hampering markets in the UK is the BOE decision. The BOE decided to hold rates unchanged but lowered their growth and inflation targets. The BOE had been on track to hike rates over the next year, and now that is in question. The British Pound and EU Euro both surged on the news, advancing more than 1.0% versus the dollar, with little impact from the BOE decision seen in the price action.

US Equities Quietly Rebounding

The US equities market was indicated to open higher on Thursday morning, supported by robust earnings from DowDupont and Cigna. Both companies reported better than expected and provided positive outlook which sent shares higher in premarket trading. The Dow Jones Industrial Average was leading the market in the early hours, up roughly 0.40% at 8:30 AM, and followed closely by the broad market S&P 500 and tech-heavy NASDAQ Composite.

Traders will continue to eye earnings as there are several important releases due out after the bell including Apple, Starbucks, and US Steel. On the economic front, traders have their eye on Friday’s labor data which includes the all-important NFP, unemployment rate, and average hourly earnings. Average hourly earnings and wage inflation will be the most important data point. Wage inflation has been running a hot 2.9% YOY and may lead the FOMC to hike rates faster than expected.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US