Morning Wrap (19.10.2023)

• Asian shares experienced a significant selloff due to concerns about rising Treasury yields and increasing Middle East tensions.

• 10-year US government bond yields rose for the fourth consecutive day, reaching new high at 4.96%

• Major Asian stock indices, including Sydney, Hong Kong, mainland China, and Tokyo, declined by over 1%.

• Gold prices remained stable, having risen about 7% since the Hamas attack on Israel on October 7.

• Oil prices surged due to Iran's intensified criticism of Israel after a Gaza hospital explosion.

• United Airlines' shares dropped around 10% due to concerns about the Israel-Hamas conflict and rising aircraft fuel prices.

• UK Prime Minister Rishi Sunak is set to visit Israel on Thursday.

• Japan's Top Currency Diplomat Kanda highlighted global economic risks, attributed China's economic slowdown to policy failures, and predicted India's potential to surpass the US economy.

• Russian Foreign Minister Lavrov expressed concerns about the Gaza conflict becoming a regional issue.

• Biden clarified that the US has not offered troops in case Hezbollah initiates a war on Israel.

• Barclays anticipates a Fed interest rate hike by 25 bps in December, shifting from their initial November prediction.

• Japan's Chief Cabinet Sec. Matsuno expressed hopes for oil-producing countries to maintain global market stability.

• Australia macro data pack:
  • Australian Unemployment Rate: 3.6% (Forecasted: 3.7%, Previous: 3.7%)
  • Australian Full Time Employment Change: -39.9k (Previous: 2.8k)
  • Australian Participation Rate: 66.7% (Forecasted: 67%, Previous: 67%)
  • Australian Employment Change: 6.7k (Forecasted: 20k, Previous: 64.9k)

• Japan macro data pack:

  • Japanese Imports YoY: -16.3% (Forecasted: -12.7%, Previous: -17.8%)
  • Japanese Total Trade Balance: 62.4B (Forecasted: -451.45B, Previous: -930.5B)
  • Japanese Exports YoY: 4.3% (Forecasted: 3%, Previous: -0.8%)

China's HSCEI Index is losing more than 2.0% today, while CHN.cash CFDs on the index are trading more than 1.0% lower. The price of the index is dangerously approaching the level of the lower limit of the descending triangle. If this resistance is broken with increasing volume, we can expect deeper declines to new lows.