EQUITIES
Shares in Asia-Pacific traded mixed on Wednesday, as investors reacted to the release of Chinese trade data.
Mainland Chinese stocks were lower, with the Shanghai composite slipped 0.35% lower, while the Hong Kong's stock market was closed in the morning because of a typhoon. Hong Kong Observatory had issued an alert that the “Storm Signal No. 8” is set to remain in force up to 4 p.m. According to the Hong Kong exchange’s rules, all trading sessions will be cancelled if that storm signal or a higher alert level remains in place at 12:00 p.m. local time.
Elsewhere, The Japan’s Nikkei 225 slipped 0.05%, while the Australian stocks were also in negative territory as the S&P/ASX 200 traded 0.10% lower.
South Korea’s KOSPI advanced 1.18%, and the S&P BSE Sensex in India added 0.50%. In Southeast Asia, the Straits Times index in Singapore was up 1.41%.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.34%, to 34,378.34, the S&P 500 lost 0.24%, to 4,350.65 and the Nasdaq Composite dropped 0.14%, to 14,465.93.
OIL
Oil prices dropped on Wednesday, after a mixed finish in the previous session, amid worries that soaring coal and natural gas prices stoking inflation and slow global growth, hence reducing oil demand. A strong U.S. dollar, trading near a one-year high, also weighed on oil prices, as it makes oil more expensive for those holding other currencies.
Data from the American Petroleum Institute, an industry group, is due later today and from the U.S. Energy Information Administration, due on Thursday.
Still within sight of a three-year high, the Brent now traded at $82.99 per barrel, while U.S. crude futures traded at $80.38 per barrel.
Overnight, the Brent ends at $83.42 a barrel, and the WTI settled at $80.64 per barrel.
CURRENCIES
The dollar held near a one-year high versus major peers on Wednesday, amid rising expectations the Federal Reserve will announce a tapering of stimulus next month, potentially following with interest rate hikes by mid-2022. Three Fed policymakers said overnight that the U.S. economy has healed enough for the central bank to begin to withdraw its crisis-era support, cementing expectations the Fed will start to taper its monthly bond purchases as soon as next month.
The dollar index, which tracks the greenback against a basket of peers, eased slightly to 94.350 from Tuesday, when it touched 94.563 for the first time since late September 2020.
The U.S. 10-year Treasury yield retreated, aided by solid demand at an auction, to 1.573%, from 1.605% on Friday.
In cryptocurrencies, bitcoin traded around $56,317, eased off a five-month high at the start of the week. Ether, the world's second biggest cryptocurrency dropped to $3,499.
GOLD
Gold largely flat on Wednesday as investors awaited U.S. inflation data and minutes from the Federal Reserve’s last policy meeting for clues as to when the central bank would start withdrawing its pandemic stimulus.
Spot gold was at $1,761.60 per ounce, while the U.S. gold futures were at $1,760.50.
Spot silver gained 0.40% to $22.60 per ounce, platinum fell 0.70% to $1,004.40, and palladium was 0.60% lower at $2,035.50 per ounce.
ECONOMIC OUTLOOK
Asian shares were on edge on Wednesday, as investors reacted to the release of Chinese trade data for September, and as a global energy crunch fuelled inflation fears, clouding investor sentiment before the U.S. corporate earnings season.
China’s imports rose 17.6% from a year earlier in September, customs data showed Wednesday, missing expectations for a 20% rise. Exports in September rose 28.1% exceeding forecasts for a 21% year-on-year rise. China's thermal coal prices surged to fresh record highs today as recent floods in key coal producing province Shanxi worsened a supply crunch, just as new efforts by Beijing to liberalise power prices boosted demand from power generators.
Concerns also are still mounting about contagion among indebted developers in China. Sinic Holdings Group Co. has become the latest real-estate firm to warn of imminent default.
The upcoming flurry of corporate earnings releases will provide a window on whether businesses expect price pressures to crimp profit margins. JPMorgan reports on Wednesday, followed by BofA, Morgan Stanley and Citigroup on Thursday, and Goldman on Friday.
Also contributing to the uneasy mood, markets are waiting for a raft of data releases due to be published Wednesday, including U.S. CPI data, and minutes of the U.S. Federal Reserve's September policy meeting.
