Morning wrap (17.07.2023)

• Stock markets in China, South Korea, and Australia declined, while Japan's markets were closed for a holiday and Hong Kong's trading was expected to be canceled due to a typhoon.

• Asian equities also fell due to US bonds and stocks facing obstacles, raising concerns about the Federal Reserve's ability to tackle inflation.

• Indices from Asia-Pacific traded mostly lower  today - S&P/ASX 200 moved 0.14% lower, Kospi drops 0.3%

• Extreme weather conditions in Hong Kong led to the cancellation of morning trading sessions for CHNComp and HKComp on the XTB platform.

• China's central bank maintained its medium-term lending facility unchanged despite calls for further stimulus.

• Chinese economic indicators showed industrial output and retail sales growth below forecast, while unemployment remained steady. The China Stats Bureau acknowledged improving domestic economic conditions but cited complex global political and economic factors as challenges.

• Chinese industrial output year-on-year (YoY) growth was 4.4%, higher than the forecast of 2.5% and the previous rate of 3.5%.

• The Chinese unemployment rate remained at 5.2%, in line with the forecast and the previous rate.

• Chinese GDP YoY growth was 6.3%, lower than the forecast of 7.1% but higher than the previous rate of 4.5%.

• Chinese retail sales YoY growth was 3.1%, slightly lower than the forecast of 3.3% and significantly lower than the previous rate of 12.7%.

• The S&P 500 and Nasdaq 100 contracts started trading slightly lower after a small decline on Friday, following a week that saw the S&P 500 reach its highest level since mid-June.

• The US dollar showed slight changes after ending a 5-day losing streak, leading some to believe that its long bull run may be ending.

• The yen strengthened as the Governor of the Bank of Japan expressed uncertainty about the US and global economies.

• US Treasury Secretary Janet Yellen suggested de-escalating relations with China and advised against lifting tariffs prematurely.

• Oil prices fell for a second day due to increased US interest rates and a key Libyan field resuming production.

OIL.WTI - the price after breaking through the resistance level and moving above it, has now returned to around $74.6, testing the support zone again. A subsequent reaction and a return of the price to growth from this level should confirm a change in the trend.