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Stocks steady as Japan trade and New Zealand monetary policy set tone

Global equity markets were cautiously firmer to start the week’s mid-point, with Asian stocks edging higher on Wednesday as a rebound in technology shares – particularly in Japan – followed signs of stabilisation on Wall Street. Stronger-than-expected Japanese trade figures for January helped lift the Nikkei, while a steady policy decision from the Reserve Bank of New Zealand (RBNZ) underlined a still-accommodative monetary backdrop in the region. European indices advanced on Tuesday, supported by improving survey data pointing to a tentative recovery in Germany. In commodities, oil prices held near recent levels after falling on Tuesday on hopes of progress in US-Iran nuclear talks. Gold prices were trading higher around USD 4930 per ounce on Wednesday, rebounding from losses the previous day, while the US dollar was firmer and US Treasury yields were edging up across the curve.

  • Data
  • Autore Shane Strowmatt, Senior Investment Writer
  • Tempo di lettura 5 minuto

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Asian equities advanced modestly on Wednesday as technology shares, particularly in Japan, recovered some of their recent artificial intelligence-driven losses, while trading volumes stayed subdued with markets in China, South Korea, Hong Kong and Singapore closed for the Lunar New Year holiday. Australia’s ASX 200 added 0.5%, helped by gains in biotech firm CSL after a licensing deal with US pharmaceutical group Eli Lilly, while miners and energy companies such as BHP Group, Santos and Suncorp retreated following mixed earnings updates. In India, the Nifty 50 was little changed. In monetary policy, The RBNZ left its official cash rate unchanged at 2.25% on Wednesday, following a 0.25 percentage point cut in late November, and signalled that monetary policy would stay supportive as inflation gradually moves back toward target.

Japan exports hit three-year high

Japan’s Nikkei 225 rose more than 1%, supported by bargain hunting after sharp losses earlier in the week and by stronger-than-expected January trade data showing a surge in exports, even as imports fell and the country still recorded a trade deficit. Japanese exports rose 16.8% year on year in January, their fastest pace since late 2022, according to data released on Wednesday, sharply exceeding December’s 5.1% growth and comfortably outpacing market expectations. The surge was driven by a 32% jump in exports to China, compared with a 5.6% increase in December, as well as gains of about 26% to Asia overall and more than 25% to Western Europe, which more than offset a 5% decline in shipments to the US after an 11.1% drop in December.

US stocks restrained by AI worries

US equities ended mixed on Tuesday as concerns about the disruptive impact of artificial intelligence on the software industry weighed on sentiment following the long holiday weekend. The Dow Jones Industrial Average closed virtually unchanged with a gain of 0.1% at 49,533.19 points, while the technology-heavy Nasdaq 100 slipped 0.1% to 24,701.60 points after marking its lowest level in almost three months during the session, and the S&P 500 edged up 0.1% to 6843.22 points after briefly touching its weakest level since mid-December. Shares of major software providers such as Salesforce, Microsoft and Oracle fell, with broader losses across names including Intuit, MongoDB, Crowdstrike, Cadence Design Systems and Synopsys, as investors reassessed the durability of their business models in light of increasingly capable AI tools.

German economic sentiment stabilises in February

The ZEW Indicator of Economic Sentiment for Germany held at a high level in February, standing at 58.3 points, which is a marginal decline of 1.3 points from January, according to survey results released on Tuesday. The gauge of the current economic situation improved more noticeably, rising by 6.8 points to minus 65.9 points, signalling that Germany has entered a tentative recovery phase despite ongoing structural challenges for industry and private investment. Meanwhile, Germany’s inflation rate, measured by the consumer price index, increased to 2.1% year-on-year in January, up from 1.8% in December and now just slightly above the European Central Bank's 2% target. Germany’s DAX increased 0.8% on Tuesday, while the broader Euro Stoxx 50 also gained 0.8%. France’s CAC 40 rose 0.5%, and the Swiss Market Index advanced 0.8%.

UK unemployment rises as wage growth cools

UK unemployment increased to 5.2% in the three months to December, up from 5.1% in the period to November, reaching its highest level in nearly five years according to data released on Tuesday. The rise reflects subdued economic growth, with firms scaling back recruitment amid higher costs following last year’s Budget increases in employer National Insurance contributions and the minimum wage. Annual wage growth slowed to 4.2%, its weakest pace in almost four years, despite stronger pay awards of 7.2% in the public sector. The softer pay backdrop may give the Bank of England room for further interest rate cuts, while the rapid adoption of artificial intelligence may further reduce entry-level opportunities, particularly for young jobseekers.

Oil steadies after drop due to US-Iran talks

Oil prices were broadly unchanged in Asian trading on Wednesday after Brent and West Texas Intermediate futures fell nearly 2% and 1% respectively on Tuesday, as signs of progress in US-Iran nuclear negotiations reduced perceived supply risks and compressed risk premiums. Brent crude oil futures were hovering near USD 67.54 per barrel and West Texas Intermediate (WTI) around USD 62.33 per barrel after sharp losses on Tuesday. Media reports that Washington and Tehran had agreed on basic principles in talks on Tuesday boosted expectations of a potential deal that could eventually increase Iranian crude supply, even though Iran’s foreign minister stressed that a final agreement was not yet in sight.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Glencore.

Economic data in focus: UK Consumer Price Index (08:00), French Consumer Price Index (08:45), US durable goods orders (14:30), US building permits (14:30), US housing starts (14:30), US manufacturing production (15:15) and Federal Reserve monetary policy meeting minutes (20:00).

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Editor: Alessandro Fezzi
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