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APAC Week Ahead: Sentiment on the edge

global stock markets

  • A hint for you to start the week: Although last Friday’s non-farm payroll data offered a rapid bounce to the broad equity markets, investors did not enjoy much of a respite from the short-lived rally. All the US major averages closed at session lows and fell for the third consecutive week, which marks the end of the “bear markets rally”.
  • Markets performance: Most of the world’s major equity markets finished lower last week, with the US small cap, Russel 200, and the tech-heavy index, Nasdaq leading losses, suggesting that the hawkish central banks’ reiteration again started slashing market valuation for those higher leveraged equities, typically in growth stocks. Notably, the New Zealand stock markets outperformed global markets for the last month due to strong company earnings reports and positive outlooks.

 World major indices performances as of 04, September 2022

  • A Highlight for the week: Three major central banks, including the ECB, RBA, and BOC will hold policy meetings this week, with expectations for them to keep the aggressive pace on rate hikes. The European Central bank has signalled for a 75-bps increase this time.

What are we watching?

  • Selloff resumed in bond markets: The selloff in the global bond markets resumed after Fed Chair Jerome Powell confirmed “higher for longer” rates at the Jackson Hole Symposium. See bond markets movements
  • Equity markets’ bearish breakout: The S&P 500 has fallen under the 100-day moving average last week, now testing key support at 3,900. A bearish break out of this level may lead to a further selloff in the broad equity markets. Check on SPX's pricing
  • US dollar hits a fresh 20-year high: The risk-off sentiment pushes the US dollar index to hit a fresh 20-year high, while USD/JPY tops 140, the highest seen in September 1998. See USD's movements 
  • Oil and copper under pressure: Crude oil and industrial metal prices are under pressure amid the recession fears that were reignited by China’s renewed covid-lockdowns, along with the Fed and ECB’s hawkish policy stance. Trade crude oil now
  • Gold approaches key support: Gold has also fallen for the third straight week due to a strong US dollar. However, with the precious metal approaching key support near 1,680, risk-off sentiment may offer a rebounding opportunity. See gold's movements 

Economic Calendar (05 Sep – 9 Sep)

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