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Markets Update: Asian stocks gained as the dollar fell on Fed rate cut bets and stronger gold, while a surging yen hurt the Nikkei. Oil prices dropped but copper rose, and agricultural commodities were mixed.
Economic Calendar
Global Markets Roundup: 19 August 2024
Asian equities saw a modest uptick as the dollar experienced a decline on Monday, following a robust performance by global stocks the previous week. This was primarily driven by optimism surrounding the U.S. economy steering clear of a recession and a decrease in inflation, which could potentially lead to interest rate cuts. The expectation of lower borrowing costs propelled gold above the $2,500 per ounce mark for the first time, resulting in a weakening of the dollar against the euro. Conversely, a sudden surge in the yen had a negative impact on the Nikkei.
Over the weekend, Federal Reserve members Mary Daly and Austan Goolsbee hinted at the possibility of easing in September, with the forthcoming release of minutes from the latest policy meeting expected to reaffirm a dovish stance. Federal Reserve Chair Jerome Powell is slated to deliver a speech at Jackson Hole on Friday, where investors are eagerly awaiting his acknowledgment of the rationale for a rate cut.
Market futures are factoring in a quarter-point rate adjustment and indicating a 25% likelihood of a 50 basis points cut, with the forthcoming payrolls report playing a pivotal role in the decision-making process. Goldman Sachs analysts cautioned about potential downward revisions in the imminent job series benchmark revisions, which could result in a significant adjustment in job positions but might exaggerate the weakness in the labor market. Expectations of a soft landing for the U.S. economy have bolstered S&P 500 and Nasdaq futures, while EUROSTOXX 50 futures have shown a slight increase and FTSE futures a marginal decrease.
Shares in the Asian-Pacific region, excluding Japan, recorded a gain of 1.0%, following a 2.8% surge the previous week. The Nikkei declined due to a stronger yen, whereas Chinese blue chips exhibited a modest rise. Amidst deliberations by global central banks on looser policies, the dollar weakened against the yen and euro. Analysts are forecasting further depreciation of the dollar in the near term due to anticipated Fed rate cuts.
Lower bond yields and a weaker dollar have bolstered gold prices around the $2,500 per ounce mark. Oil prices saw a decline due to persistent concerns about Chinese demand. Brent crude dropped to $79.57 a barrel, while U.S. crude fell to $76.45 per barrel. Copper prices have surged in early Asian trading, driven by concerns over constrained supply. The price of September soft red winter wheat on the Chicago Board of Trade (CBOT) (WU24) confidently decreased by 0.4% to hit $5.28 per bushel. On the other hand, CBOT corn ZC1! demonstrated a strong 0.6% rise, reaching $3.94-3/4 per bushel, while soybeans ZS1! surged by 1% to $9.66-3/4 per bushel.
Here is a preview of the upcoming week in the markets:
19th-23rd August 2024:
MON: Events include the US Democratic National Convention (Aug 19-22), the Bank of Indonesia Announcement, and New Zealand Trade Balance for July.
TUE: The agenda features the US Democratic National Convention (Aug 19-22), PBoC LPR, RBA Minutes, Riksbank Announcement, CBRT Announcement, EZ Final CPI for July, and Canadian CPI for July.
WED: Activities comprise the US Democratic National Convention (Aug 19-22), FOMC Minutes, and Japanese Trade Balance for July.
THU: Highlights include the US Democratic National Convention (Aug 19-22), Fed's Jackson Hole Economic Policy Symposium (Aug 22-24), ECB Minutes, BoK Announcement, EZ Negotiated Wage Rates for Q2, EZ/UK/US Flash PMIs for August, and New Zealand Retail Sales for Q2.
FRI: The day will focus on the Fed's Jackson Hole Economic Policy Symposium (Aug 22-24), Japanese CPI for July, and Canadian Retail Sales for June.
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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