Markets in Asia exercise caution as negotiations surrounding the US debt ceiling conclude without an agreement, intensifying concerns of a potential default. The outcome of talks between US President Biden and House Minority Leader McCarthy was highly anticipated, given the critical nature of the US borrowing cap deadline.
As of the latest update, Japan’s Nikkei 225 fell by 0.55%, ChinaA50 experienced a decline of 0.88%, Hang Seng slipped by 0.45%, while Nifty50 saw a gain of 0.47%.
Investors in the foreign exchange domain find themselves at a crossroads as the US Dollar Index hovers around 103.30.
The market remains uncertain regarding the appropriate course of action, torn between supporting the USD index following hawkish comments from Federal Reserve (Fed) policymakers and punishing it due to further delays in resolving the US borrowing cap issues.
The absence of significant selling action in the USD Index suggests that investors maintain confidence that the US debt-ceiling will be raised in a timely manner.
Despite robust Purchasing Managers’ Index (PMI) figures, Japanese equities have been unable to capitalize on the positive data. The manufacturing PMI surged to 50.8, surpassing estimates of 49.5, while the services PMI soared to 56.3 compared to the estimated 55.2.
The Japanese economy displays resilience as PMI numbers continue to climb following significant expansion in the Gross Domestic Product (GDP) during Q1.
Despite positive developments in US-China trade relations, Chinese stocks face challenges. China’s Commerce Minister, Wang Wentao, held a seminar for US companies investing in China on Monday, promising accurate and efficient service guarantees for foreign-funded enterprises.
In the realm of oil, the price of crude encounters obstacles around $72.50 amid further delays in US debt-ceiling negotiations.
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