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Markets Update: Anticipation of U.S. inflation data and upcoming French elections caused Asia-Pacific shares to dip while the dollar strengthened against the yen, prompting concerns from Japanese officials and pressuring oil prices.
Economic Calendar
Global Markets Roundup: 24 June 2024
Asia-Pacific shares dipped on Monday as investors anticipated U.S. inflation data, hoping it would show renewed moderation. Meanwhile, markets remained on alert for possible Japanese intervention as the dollar tested the 160 yen threshold. Geopolitical events also influenced the market, with the first U.S. presidential debate scheduled for Thursday and the initial round of the French election taking place over the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) fell by 0.8%, following a peak last week not seen in two years. South Korea's KOSPI also dropped by 0.8%. In the U.S., S&P 500 futures ES1! and Nasdaq futures (NQ1!) fluctuated around the flat line. Boeing (BA) shares might come under pressure after Reuters reported that U.S. prosecutors are considering criminal charges against the aircraft manufacturer. EUROSTOXX 50 futures FESX1! eased by 0.1%, while FTSE futures (Z1!) fell by 0.3%. Japan's Nikkei NI225 rose by 0.7%, although the yen's continued decline is pressuring the Bank of Japan to tighten policy despite inconsistent domestic economic data. Minutes from the central bank's latest policy meeting, released on Monday, indicated extensive discussion about reducing bond purchases and raising interest rates. France's far-right National Rally (RN) party and its allies led the first round of the country's elections with 35.5% of the vote, according to a poll published on Sunday.
In contrast, U.S. manufacturing surveys showed activity at a 26-month high in June, though price pressures have significantly decreased. This shift has heightened interest in the personal consumption expenditures (PCE) price index due on Friday. Annual growth in the Federal Reserve's preferred core index is expected to slow to 2.6% in May, the lowest in over three years. The Fed is well aware of this, as the median dot for end-2024 was 2.8% for PCE, unchanged from its current level and implying average monthly outcomes of 0.18%." A low result would likely reinforce market expectations of a Fed rate cut as early as September, which futures currently price as a 65% probability. This week, at least five Federal Reserve officials are scheduled to speak, including San Francisco Fed President Mary Daly and Fed Governors Lisa Cook and Michelle Bowman.
In currencies, the euro was testing recent highs at 170.87 yen EURJPY, despite weak manufacturing surveys (PMI) that kept it at $1.0692 EURUSD. "The decline in the Euro area flash June PMI raises some concern that the nascent rebound is being cut short," wrote analysts at JPMorgan. They noted the abruptness of the drop, particularly with the French election looming, as firms cited it as a reason for the downturn. Japan's top currency official expressed concern early Monday about the yen's latest drop, which saw the dollar peak at 159.94 yen USDJPY. The dollar slightly softened to 159.74 yen, close to the 160.245 yen peak from late April, where Japan reportedly began spending around $60 billion to support the yen. The dollar index DXY, was trading last at 105.82. The AUDUSD was 0.1% lower at $0.6633. The NZDUSD lost 0.2% to $0.6108.
In commodities and agricultural commodities market, GOLD has felt the pressure of a strong dollar, standing at $2,324 an ounce. Oil prices also eased slightly after rising about 3% last week, with Brent crude BRN1! slipping 7 cents to $85.17 a barrel and U.S. crude CL1! also down 7 cents to $80.66 per barrel. Three-month copper on the LME HG1! was trading 0.1% lower at $9,672.50 per metric ton. The most-active wheat contract on the CBOT ZW1! was trading unchanged at $5.76 a bushel. On Friday, September London cocoa CC2! ​​closed 0.6% lower, to 7,319 pounds per metric ton.
Looking ahead today, markets anticipate, German Ifo Business climate, UK CBI Industrial Trends Orders, Dallas Fed Manufacturing.
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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