MORNING BID EUROPE-Australia hikes but tempers its outlook -November 07, 2023 at 12:30 am EST
A look at the day ahead in European and global markets from Tom
Westbrook:
Bond markets have curbed a little of last week’s
enthusiasm about a prospective peak in global interest rates,
but still cheered a rate hike in Australia that looks to be the
last of the cycle.
The Aussie dollar fell more than 0.8% and
Australian government bonds rallied because the 25
basis point hike by the Reserve Bank of Australia came with a
softening of language on whether further hikes would be needed.
The ASX200 lifted from mid-session lows.
It was an otherwise quiet session in the absence of major
updates that might have consequences for the interest rate
outlook.
Gravity dragged South Korean shares back to earth, with the
Kospi, which soared 5.7% on Monday after a short-selling
ban was re-imposed, falling 3%.
Three days of strong gains for the MSCI Asia ex-Japan index
also came to an end.
Data showed Chinese imports unexpectedly grew in October, a
welcome signal on domestic consumption, but exports contracted
at a quicker pace than expected, giving a mixed picture overall.
Last week’s chaos in Chinese money markets has subsided but
it left behind a glimpse of financial pressures beneath the
surface and the challenges around China’s uneven recovery from
the COVID-19 pandemic.
Read Reuters’ exclusive report on what happened here:
Clashing priorities behind China’s rare money market distress.
British house prices, German industrial output and European
producer prices are due later on Tuesday, as are earnings from
UBS.
Overnight news from the U.S. included the latest humbling of
WeWork, which sought bankruptcy protection. It expects to
continue in business, but the move represents an admission by
majority owner SoftBank that the office-space firm cannot
survive unless it renegotiates its pricey leases.
Israeli Prime Minister Benjamin Netanyahu said his
government would consider “tactical little pauses” in fighting
to facilitate the entry of aid or the exit of hostages from the
Gaza Strip, but again rejected calls for a ceasefire despite
international pressure.
Without a Fight won the 163rd Melbourne Cup by two lengths.
Key developments that could influence markets on Tuesday:
Earnings: UBS
Economics: German industrial output, Euro zone producer
prices, UK house prices, NY Fed household debt report
Speakers: Fed’s Waller, Logan and Schmid, ECB’s de Guindos
and McCaul, BoC’s Kozicki
(Reporting by Tom Westbrook; Editing by Edmund Klamann)
