Morning Wrap (28.09.2023)

• Asia-Pacific markets are mostly trading lower, with the Australian S&P/ASX 200 being the sole gainer with only a 0.1% increase. On the other hand, Chinese indices and the Japanese Nikkei 225 are experiencing losses of over 0.60% and 0.80%, respectively.

• Asian shares fall due to rising global oil prices, which bolster the case for prolonged higher interest rates.

• The US benchmark oil price hits $95 per barrel, its highest in over a year, following a decrease in inventories at a major storage hub. 

• The 10-year Treasury yield hovers around 4.6%, its peak since 2007, exacerbating concerns about persistent inflation.

• Chinese developers face further losses, reaching lows not seen since 2011, with trading in China Evergrande suspended on the Hong Kong stock exchange amid ongoing debt challenges.

• Japan's Finance Minister Shunichi Suzuki is warning against speculative trading on the yen, which is nearing an 11-month low with USDJPY nearly 150 per dollar. While he hasn't confirmed any plans for rate checks or interventions, he's keeping all options open to address excessive currency volatility.

• Australian Retail Sales was released today. Data came slightly weaker than expected. Final monthly change is 0.2% versus forecasted 0.3% and 0.5% previously.

• WH Economic Adviser Bernstein said that the US economy is expected to keep going in a pretty good direction absent a policy mistake or exogenous shock. The US economy is facing headwinds from a possible shutdown, student debt restart, higher interest rates and United Auto Workers (UAW) strike.

• Precious metals are trading virtually flat. There were no significant movements in the first part of the day.

• Cryptocurrencies are trading slightly higher, but without any sharp movements. However, cryptocurrencies are supported by the growing concerns of investors about fears of a US government shutdown, excessive debt, and huge interest payments.

The price of oil continues its upward movement today. In the first part of the day, the price for a barrel of oil reached $95 for a while, and is currently holding slightly below at $94.50. Source: xStation 5