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Markets update: Asia-Pacific stocks closed the week down after profit-taking erased earlier gains fueled by expectations of Fed rate cuts, while the strengthening dollar pressured currencies like the euro and yen as central banks in Europe eased monetary policy.
Economic Calendar
Global Markets Roundup: 21 June 2024
Asia-Pacific shares concluded the week with a lackluster performance, following a surge to 26-month highs earlier in the week that prompted profit-taking. Meanwhile, the yen faced persistent pressure due to the strengthening U.S. dollar, as central banks in Europe moved to cut interest rates. Overnight, the Swiss National Bank implemented a second rate cut, while the Bank of England signaled potential easing in August after maintaining steady rates. Consequently, the sterling, Swiss franc, and euro all weakened, contributing to a broader rise in the dollar.
The MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dropped 0.6% on Friday, led by a decline in technology shares, mirroring a mixed session on Wall Street the previous night. Despite this, the index is poised for a 1% weekly gain, having reached its highest level since April 2022 on Wednesday. This rise was fueled by soft U.S. data, which bolstered expectations of two rate cuts by the Federal Reserve later this year. Japan's Nikkei NI225 inched up 0.1%. Earlier data revealed that Japan's demand-led inflation slowed in May, complicating prospects for interest rate hikes. Chinese stocks remained largely unchanged, with the Shanghai Composite Index 000001 struggling to stay above the critical 3,000-point mark, while Hong Kong's Hang Seng Index HSI fell by 0.9%.
U.S. Treasury yields edged higher, with two-year yields (US2YT=RR) increasing by 2 basis points (bps) to 4.745% on Friday, marking a 6 bps rise for the week. The 10-year yield US10Y also rose by 1 bps to 4.2672%, culminating in a 5 bps weekly gain.
In foreign exchange markets, the euro EURUSD stabilized at $1.0705, after a 0.4% drop overnight amid accelerating European rate cuts. Sterling GBPUSD remained flat at $1.2658, its lowest in five months. The dollar also maintained gains against the Swiss franc USDCHF at 0.8916 francs, having surged 0.8% overnight. Conversely, the Australian dollar soared to a 17-year high against the yen at 105.85 yen AUDJPY, driven by a still hawkish outlook from Australia's central bank. The yen USDJPY slipped another 0.1% to 159.01, its weakest point since late April, when Japanese authorities intervened to halt rapid currency declines
In commodities/agricultural commodities, oil prices stabilized on Friday after reaching seven-week highs earlier in the week. Brent BRN1! futures slipped 0.1% to $85.59 per barrel, while U.S. crude CL1! also dipped 0.1% to $81.19 per barrel. Gold prices GOLD remained steady at $2,358.83 per ounce. The most-active wheat contract on Chicago CBOT ZW1! has lost 0.2% at $5.84-3/4 a bushel, while CBOT soybeans ZS1! edged 0.3% higher to $11.58-3/4 a bushel and corn ZC1! climbed 0.2% at $4.40-1/2 a bushel.
Looking ahead, markets anticipate, UK Retail Sales, German HCOB Manufacturing PMI Flash, Canada Retail Sales, US Existing Home Sales.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team