Morning Wrap (06.02.2024)

Indices in the Asia-Pacific region are mainly recording a negative session, except for China. The Japanese Nikkei 225 is down 0.78%, while the Australian S&P ASX 200 is losing 0.35%. Chinese indices are dynamically gaining between 3.00-4.00% following an alleged request from the China Securities Regulatory Commission for stock market support.

In the first part of the forex market session, larger movements are already noticeable. The dollar is one of the weaker currencies, with the Australian dollar on the other end after RBA cash rate decision and press conference. AUDUSD is up 0.45%.

According to confidential information, Chinese President Xi Jinping received reports from Chinese regulatory bodies about the need to support financial markets and stop further price declines. Stocks in China and Hong Kong have lost about 7 trillion dollars in value since their peaks in 2021.

The rise in China's stock market is also due to a normal rebound after recent dynamic falls and the high state of sell-off in the domestic market.

Japan's Prime Minister Kishida emphasizes that specific monetary policy decisions depend on the BOJ. The government is taking steps to achieve stable wage growth accompanied by moderate inflation. The Prime Minister hopes that the BOJ will consider this when making monetary policy decisions.

The RBA maintains the cash rate at 4.35%, as expected. Chairperson Michelle Bullock remains hawkish, indicating that another rate hike cannot be ruled out.

While recent data indicate that inflation is falling, it remains high. The Council expects it will take some time before inflation is permanently within the target range.

During the press conference, the Australian dollar gains and reaches the highest level of the day. However, the increases are also supported by reports of planned support for the Chinese stock market.

Cryptocurrencies are trading with little change. Bitcoin is down just 0.05% to 42600 USD, while Ethereum gains 0.40% to 2310 USD.