declines in Asia; Investors await reports and macro data

Trade overview: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations

08:00

Asian stock markets are trading lower, after a negative closing on Wall Street last night. The Nikkei index in Tokyo is trading down about 0.2%, in China the Shanghai index is down about 0.5%, in Hong Kong the Hang Seng index is down 1.3% and the Seoul Kospi shed 0.7%.

Trading in futures contracts on US stock market indices shows a mixed trend with a downward tendency.

● High-tech stocks have the best January in decades; Is there room for optimism?

On Wall Street, as mentioned, a negative trend was registered last night. The Dow Jones fell 0.8%, the S&P 500 fell 1.3% and the Nasdaq ended down 2%.

In commodity trading, there are now slight decreases in oil contracts, after sharp decreases yesterday. Brent oil futures fell 2% to $85 per barrel and US crude fell 2.3% to $77.8. Gold recorded a slight drop to $1,920.

In the global forex market, the dollar is now trading stably against the euro and the pound sterling and has weakened by 0.1% against the Japanese yen.

In the crypto arena, slight increases are recorded in the leading currencies after yesterday’s sharp declines. Bitcoin is trading up 0.8% and is trading around $22,800, and Ethereum is up 1.4% to $1,570.

There is also good news: the International Monetary Fund yesterday (Monday) revised its global growth forecasts for the coming year upwards, but warned that it is likely that high interest rates and Russia’s invasion of Ukraine will still weigh on global economic activity. The fund announced that according to its forecasts the world economy will grow this year by 2.9% – which represents an improvement of 0.2% from its previous forecast in October. However, this number still represents a drop from the 3.4% expansion in 2022. It also revised its forecast for 2024 to 3.1% growth.

This morning, unemployment data were published in Japan, the rate of which remained stable at 2.5%, industrial production (a decrease of 0.1%) and retail sales (an increase of 3.8% compared to an expected increase of 3.2%). In China, the Purchasing Managers’ Index (PMI) of industry was published for January, which stood at 50.1 points, in line with expectations. The PMI of the service sector in China reached 54.4 points compared to an expectation of 52 points.

Later today, growth and inflation data will also be published in France and Germany. After a slight moderation, the expectation is that in January inflation in Germany increased by 1% so that the annual rate of price increase will climb to 9.2%, after measuring 8.6% in December. In the US, the Case Shiller house price index will be published.

The main drama in the macro sector is expected on Wednesday evening (21:00 Israel time) when the Federal Reserve will probably announce another interest rate hike, with the vast majority of economists and traders estimating that it will be at a rate of 0.25%. This is after an interest rate increase of 50 basis points in December, the seventh in the number in 2022, which brought the interest rate in the US to the highest level since 2007. This was the beginning of the downshift by the Fed, as this decision was preceded by four consecutive increases at a rate of 75 basis points .

Investors are also preparing for the publication of the reports of the technology giants this week, in addition to Microsoft and Tesla which published last week and supported the weekly increases of the indices, with the latter jumping more than 30% within a week. On Wednesday you will post Meta (Facebook) and on Thursday the main drama is expected with the publication of reports of Dark Amazon and Alphabet (Google).

In the US government bond trading arena, yields continued to rise yesterday. The yield on the 10-year bond increased by 4 basis points to 3.55%, and the yield on the two-year bond increased by 5 points to approximately 4.25%. Now the bonds are trading stably.