Asian Markets Await Nvidia Verdict: Since everyone was watching Nvidia on Wednesday, Asian markets were cautious. Financial market analysts want to know if the recent bond rate hike will harm IT prices. Several weak Japanese industry signals made the situation worse.
Early signals in Europe suggest a delicate start. EUROSTOXX 50 futures rose 0.2%. S&P 500 and Nasdaq futures contracts rose 0.3% and 0.4%, respectively.
The Asian location made it complicated. MSCI’s Asia-Pacific stock index climbed 0.3%, dangerously near to its nine-month low set a few days ago. Japan wasn’t included. However, the S&P 500 and Nikkei rose equally.
Japan’s industrial sector has been decreasing for three months, which is poor news for the industry. The US flash PMI statistics, which are expected to confirm the industrial sector’s fall, are closely watched worldwide.
The standard 10-year Japanese government bond rate rose to 0.675%, the highest in 9 and a half years. It had not been this high in nearly 10 years. Market participants felt the Bank of Japan’s refusal to buy bonds meant they were happy with greater selling.
Chinese bluechips fell 0.9% after failing to maintain their pace from the previous day. Fortunately, the Hong Kong Hang Seng Index rose 0.6%.
On the raw materials market, iron ore prices rose 5% to a two-year high. Even though Beijing repeatedly instructed local governments to decrease steel production, coking coal and coke production both increased by over 3%.
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Because Nvidia is releasing its results, all eyes are on it. The IT giant’s stellar quarter revived the tech stock market and AI hopes. This boosted the S&P 500.
Yields rose, driving Wall Street insane. It hit a stunning high point not seen in 16 years. Due to this new information, the Dow Jones sank 0.5%, the S&P 500 fell 0.3%, and the Nasdaq Composite rose 0.1%.
S&P 500 banks lost 2.4% during a tough banking industry. This happened when S&P and Moody’s lowered the ratings of many US smaller banks.
The recent international hard ride of Treasuries paused briefly. Asian trading center 10-year bond yields fell to 4.3062 percent from a 16-year peak.
An increase in Treasury issues, China’s planned selling of Treasury bonds to strengthen its currency, and Fitch’s latest credit rating have fueled the sell-off. To better understand the situation, everyone is waiting for the Fed meeting in Jackson Hole, Wyoming.
The early statements of Richmond Federal Reserve President Thomas Barkin have prompted more people anticipate Chair Jerome Powell will take a tougher stance, especially given recent solid economic news for the US.
Currency markets remained calm despite the Jackson Hole summit. Compared to other major currencies, the US dollar remained strong and traded at levels not seen in two months.
Meanwhile, the yen rose 0.2%, escaping a nine-month low. This happened despite claims that Japan would only intervene to stabilize the currency if it went below 150 yen per dollar.
Finally, oil prices rose little in goods. Brent oil futures priced $84.09 and West Texas Intermediate crude futures $79.72 last time I checked. The market price of gold rose 0.3% to $1,902.68 per ounce.