Morning wrap (17.05.2023)

• Indices from Asia-Pacific struggles for direction today, with mixed performance from leading markets. This is a potential response to mixed closing of Wall Street session on Monday when US500 closed with +0.11% gains

• S&P/ASX 200 gains 0.1%, Kospi trades 0.6% higher and Nifty 50 declines 0.1%. Indices from China trade fell 0.3% - HKComp performed slightly better. 

• The Japanese index adds 0.35% and is trading at 30,100 points. The NIKKEI 225 index is one of the best performing indices from the last couple of days and now is trading near an all time high after strong economic data and positive comments from country leaders.

• DAX futures point to a slightly higher opening of the European cash session today, with DE30 trading 0.3% higher at 15.964 points. 

• Energy commodities are trading sideway - Brent and WTI trade 0.2% higher while US natural gas prices falls 0.6%

• Precious metals continue weaker performance with gold trading once again below $2,000 per ounce and silver at $23,6 per ounce - over 10% lower than last month highs

• The dollar held steady in trading, supported by positive US data, particularly in retail sales. USDJPY maintained its upward push above 136.00. Dollar pairs trade with limited volatility, which may persist during the European trading session.

• Fed's Bostic highlights that if unemployment rises and inflation remains sticky, the Fed will face enormous pressure. The Fed must maintain a strong commitment to inflation, although it is unclear what actions they would take in the event of a debt default.

• Japanese shares extended their gains due to stronger-than-expected economic growth, boosting market optimism. Goldman Sachs suggests that Japan's markets may be on the verge of a rare bull market. Wall Street strategists attribute the gains to corporate reforms and easy monetary policy, predicting another 10% increase in shares.

• Japan's economy grew at its quickest rate in three quarters, according to the reading, which showed an annualized rate of GDP growth for Q1 at 1.6% versus 0.7% expected.

• Economy Minister Goto emphasizes the need to carefully watch the impact of price rises on consumers. Future economic growth is expected to be moderate, supported by rising salaries, better attitudes, and company investment. The Japanese government approved an electricity bill rise, expected to keep inflation above 2% for longer than expected.

• The BoJ may consider to revise its Yield Curve Control (YCC) policy at the upcoming June meeting. The stronger-than-expected GDP outcome supports the view that the BoJ could take a step toward normalization soon.

NIKKEI 225 index is one of the best performing indices. Price is near the all time high level at 30,500 points.