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Markets update: Global markets stabilized, awaiting a key Fed speech. The dollar weakened, commodities were mixed. The market reacted to inflation data and Bank of Japan comments, anticipating a US rate cut.
Economic Calendar
Global Markets Roundup: 23 August 2024
Global stocks stabilized on Friday, hovering close to record highs, while the dollar remained weak near one-year lows in anticipation of a speech by the world's most influential central banker. Investors are eager to glean insights on the potential trajectory of U.S. interest rate cuts from the speech. In early trading, Europe's broad Stoxx 600 index SXXP edged up by 0.14%, Asian shares excluding Japan dipped by 0.1%, and Japan's Nikkei NI225 rose by 0.4%.
The market reacted to inflation data and comments from Bank of Japan governor Kazuo Ueda indicating a readiness to adjust interest rates based on economic and inflation projections. The MSCI's all-country world index EURONEXT:IACWI saw a slight increase, currently trading approximately 1% below its peak in mid-July. S&P500 futures SPX climbed by 0.3%, signaling positive market sentiment. The highlight of the week remains Federal Reserve Chair Jerome Powell's upcoming speech at the Kansas City Fed's annual Jackson Hole Research conference.
With U.S. economic data supporting a rate cut, markets are pricing in a 25 basis point reduction in September, with expectations of further cuts at the remaining Fed meetings this year, possibly including a larger 50 basis point cut. Investors are closely monitoring Powell's speech to assess whether it aligns with or challenges current market expectations. Given the limited scope for surprises, the general consensus anticipates some form of easing in September, barring unforeseen data disruptions.
The anticipation of rate cuts has sustained U.S. Treasury prices, with the 10-year Treasury yield holding steady at 3.857%. Similarly, the German equivalent remained unchanged at 2.25%. The dollar has been under pressure due to low U.S. yields, with the euro EURUSD maintaining stability at $1.1119 and sterling GBPUSD struggling to surpass its July 2023 level. Meanwhile, the Japanese yen strengthened against the dollar, with the USDJPY pair declining to 145.85.
Commodities are poised to conclude the week on a lower note, with Brent crude futures BRN1! inching up to $77.59 per barrel despite a weekly decline of over 3%. Gold prices GOLD rose by 0.5% to $2,496.6 per ounce, nearing its recent peak of $2,531.6. The soft red winter wheat contract with the highest activity on the Chicago Board of Trade (CBOT) ZW1! declined by 0.8% to $5.31-1/4 per bushel. CBOT corn ZC1! edged up by 0.1% to $3.93-3/4 per bushel, while soybeans ZS1! rose by 0.4% to $9.65-3/4 per bushel, although both commodities remained near the four-year lows reached last Friday.
In New York, cocoa futures for December delivery CC2! increased by 0.7% to $7,804 per metric ton by 1127 GMT, rebounding towards the previous day's one-month peak of $7,915. Meanwhile, December cocoa futures in London C2! climbed by 1.4% to 5,545 pounds per ton. Raw sugar futures for October delivery SB1! rose by 2.2% to 18.24 cents per pound, while white sugar futures for October delivery SF1! increased by 2% to $522.20 per ton. Robusta coffee futures for November delivery RC2! inched up by 0.04% to $4,576 per ton, hovering just below the one-month high of $4,658 reached earlier in the week. On the other hand, arabica coffee futures for December delivery KC2! declined by 0.2% to $2.4235 per pound.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
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