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Summary:
- Oil edged slightly higher and gold fell, as reports pointed to US and Israeli preparations for renewed strikes on Iran
- The US dollar weakened against the euro, Swiss franc, sterling, yen and Canadian dollar, while the Australian and New Zealand dollars dipped
- New Zealand Q3 CPI slowed to 3.7%, below the 3.8% forecast, but markets still price a near-certain RBNZ hike next week
- The Bank of Korea held its benchmark rate at 3.00%, as expected, after back-to-back hikes in July and August
- Regional equities mostly fell: the Hang Seng dropped about 2.5%, the Nikkei 225 and Shanghai Composite lost around 1%, and the Kospi fell more than the Nikkei
- Meta beat revenue and earnings forecasts and its shares rose, while Tesla climbed to three-month highs on strong margins and free cash flow
Main article:
Asian markets delivered a mixed session on Thursday, with regional equities mostly lower, the US dollar softer against most major currencies and oil edging higher as reports pointed to renewed US and Israeli military planning against Iran. News flow was relatively light, with much of the session’s coverage focused on outlooks and analyst views.
Geopolitics remained the main backdrop for commodities. The New York Times reported that the US and Israeli militaries have drawn up plans for a short but intensive round of strikes on Iran after the US midterm elections. It noted, however, that President Donald Trump has repeatedly called off planned attacks this year. NBC News separately reported that the US is reducing troop numbers at Middle East bases and cutting diplomatic staff in the region, after the State Department ordered non-emergency personnel to leave Saudi Arabia. Oil prices tracked slightly higher, while gold fell.
In currency markets, the US dollar mostly weakened, losing ground against the euro, Swiss franc, British pound, Japanese yen and Canadian dollar. The Australian and New Zealand dollars bucked the trend and dipped.
The New Zealand dollar slipped after third-quarter inflation came in slightly below expectations. Annual CPI slowed to 3.7% from 4.1%, under both the 3.8% consensus and the Reserve Bank of New Zealand’s 3.9% projection, while quarterly prices rose 0.7%. Inflation remains above the RBNZ’s 1% to 3% target, and markets continue to price a near-certain rate hike at next week’s policy review, with economists expecting inflation to pick up again in the fourth quarter as fuel prices rise.
The Bank of Korea held its benchmark rate at 3.00%, as all analysts surveyed by Reuters had expected, pausing after quarter-point hikes in July and August. Economists see a further increase to 3.25% in November as likely, given strong chip-driven exports and above-target inflation.
Regional equities were broadly weaker. Japan’s Nikkei 225 fell around 1%, while South Korea’s Kospi posted steeper losses. In China, the Shanghai Composite dropped about 1%, extending a 10 week fall, and Hong Kong’s Hang Seng underperformed with a fall of around 2.5%.
On the corporate front, Meta Platforms reported third-quarter revenue and earnings per share ahead of forecasts, and its shares rose, although operating income was weighed by a $9.9 billion legal charge. The company also announced plans for an effective 2-for-1 stock split through a new class of non-voting shares. Tesla shares climbed to three-month highs after the company beat expectations on gross margin and free cash flow, and set a target of producing about 5 million vehicles a year by 2030.
This article was written by Eamonn Sheridan at investinglive.com.
