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Markets Update: Asian stocks fell on Friday amid Middle East tensions and anticipation of the U.S. jobs report, while oil prices surged for their biggest weekly gain in over a year.
Global Markets Roundup: 4 October 2024
Asian markets saw a drop in stocks on Friday, while oil prices were set for their most substantial weekly gain in more than a year, as tensions in the Middle East continued to unsettle markets ahead of the U.S. jobs report later in the day. President Joe Biden's comments on Thursday regarding the possibility of strikes on Iran's oil facilities in retaliation for Tehran's missile attack on Israel, along with Israel's military carrying out new air strikes on Beirut in its ongoing conflict with Hezbollah, further fueled concerns. These statements contributed to a surge in oil prices, which had already been rising steadily during the week due to the escalating conflict in the region.
The prevailing sense of caution led to most stocks ending the week in negative territory on Friday. The MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) declined by 0.32% and was on track to finish the week with minimal changes. Australian shares XJO dropped by 1%, while stock futures continued their downward trend from the previous session. S&P 500 futures ES1! and Nasdaq futures both dipped by 0.03%, while EUROSTOXX 50 futures FESX1! remained steady. Japan's Nikkei NI225 also erased its early gains to trade 0.08% lower. The index was poised to register a weekly loss of over 3%. The Nikkei experienced volatile trading this week as investors assessed escalating geopolitical tensions against the domestic interest rate outlook. Japanese officials, including Prime Minister Shigeru Ishiba, indicated that the country's economic conditions did not support further rate hikes by the Bank of Japan (BOJ), emphasizing the need for caution in tightening monetary policy. In a positive development, U.S. dock workers and port operators reached a tentative agreement, bringing an immediate end to a disruptive three-day strike that had paralyzed shipping on the U.S. East Coast and Gulf Coast, as announced by both parties on Thursday. FESX1! | Z1! | NI225 | NQ1! | ES1!
The primary focus is on the imminent release of the U.S. nonfarm payrolls report later on Friday, which will provide further insights into the Federal Reserve's interest rate forecasts. Expectations are that the world's largest economy added 140,000 jobs last month, slightly below the 142,000 increase observed in August. Recent data releases have suggested that the U.S. economy remains strong, with the services sector activity hitting a 1-1/2-year high in September driven by robust growth in new orders. Furthermore, a separate report from the Labor Department on Thursday indicated a steady labor market at the close of the third quarter. As a result, traders have tempered their expectations of a 50-basis-point rate cut by the Fed next month, with futures now showing only a 35% probability of such an occurrence.
In currencies, the Euro (EURUSD) remained largely unchanged at $1.1031, with a weekly decline of 1.2%. Meanwhile, the British pound (GBPUSD) inched up by 0.03% to $1.3131, trying to recover from its over 1% drop on Thursday. The pound was under pressure due to cautious remarks made by Bank of England Governor Andrew Bailey, who suggested that the central bank might consider more aggressive rate cuts if there are positive developments in inflation. The dollar stayed close to a six-week peak against a range of currencies (DXY), currently standing at 101.92. The yen depreciated beyond the 147 per dollar mark, but it saw an increase in trading on Friday and was last recorded at 146.60 per dollar. Despite this, the Japanese currency was on track for a weekly drop of about 3%, marking its most significant decrease since 2016. EURUSDÂ | USDJPYÂ | DXY
In commodities, GOLD increased by 0.06% to reach $2,657.89 per ounce. Brent crude futures BRN1! dipped by 0.04% to $77.59 per barrel on Friday, but were set for a weekly rise of approximately 7.8%, marking the largest increase since February 2023. U.S. West Texas Intermediate (WTI) crude futures CL1! remained stable at $73.71 per barrel and were on course for a weekly gain of 8.1%, the most significant surge since March 2023. December, arabica coffee KC1! closed 4.45 cents lower, marking a 1.7% decrease at $2.5205 per lb. Over the past three sessions, the contract experienced a drop of almost 7%. Meanwhile, November robusta coffee RC1! decreased by 3.7% to $4,921 per metric ton as the market anticipated the acceleration of the harvest in Vietnam, the leading robusta producer. The wheat contract with the most activity on the Chicago Board of Trade ZW1! decreased by 0.8% to $5.99 per bushel. On Wednesday, the contract reached $6.17, its highest level since June 14. Prices have risen by approximately 3.4% this week. CBOT corn ZC1! fell by 0.6% to $4.25-1/2 per bushel, after reaching $4.34-1/4 on Wednesday, the highest since June 28. The contract was on track for a 1.8% increase for the week. Soybeans ZS1! remained steady at $10.45-3/4 per bushel, showing a 1.9% decline so far this week. GOLD | CL1! | ZC1! | ZS1! HG1!
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team