Overall risk sentiment remains rather disinterested
US stocks were mixed-to-higher on Tuesday, with the Dow Jones rising for a fifth straight day due to upbeat earnings from Walmart. The retailer said sales grew more than 8% while revenue rose 8.4% in the second quarter. Shares of the company gained about 5% following the release. On the data front, US housing starts in July plunged by 9.6%, suggesting the housing market is cooling amid high inflation. Meanwhile, the US industrial production index rose 0.6% in July, exceeding market expectations for a 0.3% increase. After mixed data, the Dow Jones increased 0.71%, the S&P 500 gained 0.19% and the Nasdaq Composite Index decreased 0.19%.
Asian equity markets advanced on Wednesday even as the New Zealand’s central bank delivered its seventh straight interest rate hike and signaled a more hawkish tightening path over coming months. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.42% while the Nikkei 225 Index in Tokyo gained 1.23%. Bucking the trend, South Korea’s Kospi gave up 0.46% to snap a three-day winning streak as shares of automakers Hyundai Motor and Kia Corp fell 2.5% and 2%, respectively.
European stocks opened slightly higher on Wednesday, with overall risk sentiment staying rather disinterested. The pan-European Stoxx 600 added 0.2% in early deals. The FTSE 100 in London has settled just above the flat-line after the data showed that the UK CPI rose 10.1% annually, above a consensus forecast of 9.8%. S&P 500 futures were marginally down in early pre-market deals, suggesting markets struggle for direction ahead of US retail sales data and FOMC meeting minutes due later in the day.
In currency markets, the USD index retains a modest bullish tone after yesterday’s rally towards the 107.00 figure that triggered some profit-taking eventually. The greenback has settled around 106.60 since then, adding 0.1% on Wednesday. The mentioned events in the US will set the tone for the buck in the short term, with bulls betting on a hawkish tone from the Fed despite the slowing inflation. As such, EURUSD stays below the 20-DMA, struggling to regain the 1.0200 figure after the recent rejection from the 1.0370 zone.