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Markets update: Asian markets were mixed on Friday as the yen surged due to U.S. jobs data concerns, impacting interest rates. Oil prices fluctuated, European markets were set for a lower opening, and cocoa futures surged while other commodities saw minor movements.
Economic Calendar
Global Markets Roundup: 6 September 2024
Asian markets exhibited uncertainty on Friday, as the yen surged, reflecting investor apprehension regarding the forthcoming U.S. jobs data and its potential impact on the timing and extent of future rate adjustments in the world's largest economy. Meanwhile, oil prices are on course to record their most challenging week in over a year, teetering slightly above a critical technical level, with their immediate trajectory contingent upon the impending payrolls report. Across the Atlantic, European markets are poised for a lower start, with EUROSTOXX 50 futures FESX1! and FTSE futures Z1! indicating a 0.2% decline. Nasdaq futures NQ1! slipped by 0.5%, while S&P futures ES1! dipped 0.2%.
Market analysts are anticipating the creation of 160,000 new jobs and a decrease in the unemployment rate to 4.2%. However, recent softer economic indicators have raised concerns about downside risks, fueling speculation about a substantial half-point rate reduction on September 18. ING highlighted that even if the payrolls report meets expectations, market participants might still reassess the likelihood of a 50 basis point cut.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) inched up by 0.2%, heading towards a weekly decline of 2.8%. Taiwanese shares TWSE:TAIEX performed strongly with a 1.1% gain, while Chinese blue-chips 3399300 dropped by 0.4%.
The Nikkei NI225 fell by 0.7% as the yen strengthened, impacting the outlook for Japanese exports. The index has retreated by approximately 4% this week. The Japanese yen USDJPY appreciated by 0.6% to 142.57 per dollar, resulting in a weekly gain of 2.5%, albeit subject to reversal if a robust payrolls report materializes.
Kristina Clifton, an economist at the Commonwealth Bank of Australia, noted that market prudence ahead of the U.S. payrolls release has prompted a flight to safety into the yen.
Influential Federal Reserve Governor Christopher Waller and New York Fed President John Williams are scheduled to address investors post the release of the employment data, offering immediate insights. Treasury yields witnessed a decline on Friday, extending their weekly downturn. Two-year Treasury yields (US2YT=RR) retreated by 18 basis points this week to 3.7268%, nearing lows last seen in early 2023. Ten-year yields US10Y decreased by 20 bps to 3.7080%, with the yield curve on the brink of turning positive.
Oil is grappling with its most challenging week since October 2023, primarily due to demand worries outweighing a substantial reduction in U.S. inventories and a postponement in output hikes by OPEC+ producers. Despite supply concerns, crude prices remained relatively stable. Brent crude futures BRN1! held steady at $72.68 per barrel on Friday, marking an 8.3% decline for the week. Prices hovered near a critical range of $70 to $71, breaching which could lead to levels not observed since late 2021. Gold GOLD inched up by 0.1% to $2,519 per ounce, slightly below its peak value.
In London, cocoa futures for December delivery, represented by C2!, increased by 262 pounds, or 5.3%, reaching 5,250 pounds per metric ton. This rebound followed a recent dip to 4,975 pounds, the lowest in over six months. Meanwhile, December New York cocoa prices, symbolized by CC2!, surged by 4% to $7,159 per ton. October raw sugar, denoted by SB1!, remained relatively stable at 19.22 cents per pound. October white sugar, using the label SF1!, experienced a 0.4% decline, closing at $536.80 per ton. Robusta coffee futures for November delivery, indicated by RC2!, showed minimal movement at $4,911 per ton, consolidating below the previous week's peak of $5,180, the highest level in over 16 years. Conversely, December arabica coffee prices, identified by KC2!, rose by 0.2% to $2.442 per pound.
The primary wheat contract on the Chicago Board of Trade (CBOT) represented by ZW1! decreased by 0.6% to $5.71-1/4 per bushel as of 0326 GMT, yet it recorded a 3.6% increase for the week, marking its second consecutive weekly rise. CBOT corn, symbolized by ZC1!, declined by 0.2% to $4.09-3/4 per bushel, but showed a 2.2% uptick compared to the previous Friday's close, also marking its second weekly gain in a row. Meanwhile, soybeans denoted by ZS1! dropped by 0.3% to $10.20-3/4 per bushel, yet achieved a 2.1% increase over the week, marking its third consecutive weekly growth. These upward movements were instigated by speculators adjusting their significant short positions. Contributing to the upward trend were factors like a weak dollar denoted by DXY, which boosted U.S. export demand, and poor wheat production in Western Europe.
Looking ahead today, the U.S. non-farm payrolls report holds significant importance following Federal Reserve Chair Jerome Powell's emphasis on the central bank's vigilance towards any deterioration in the labor market, setting the stage for potential rate cuts.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team