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Markets Update: Euro dips amid French political uncertainty and potential hung parliament. Investor sentiment buoyed by hopes for a U.S. Federal Reserve rate cut in September.
Economic Calendar
Global Markets Roundup: July 8, 2024
Asian stocks edged higher on Monday as investor confidence grew regarding a potential U.S. rate cut in September. Meanwhile, the euro faced challenges due to political uncertainty in France, where recent elections suggest a hung parliament.
In a surprising outcome, a leftist alliance in France has taken the lead over the far-right National Rally (RN) party, diminishing the possibility of Marine Le Pen's party running the government. While this was a relief for investors concerned about far-right policies, there are also worries that the left’s plans might roll back many of President Emmanuel Macron's pro-market reforms.
Equities gained support from the prospect of U.S. policy easing. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) increased by 0.1%, reaching a two-year high last week. Japan's Nikkei NI225 rose 0.2%, nearing record highs, while Chinese blue chips 3399300 dropped 0.4%, with bond yields rising as the central bank initiated new money market operations. S&P 500 futures ES1! and Nasdaq futures NQ1! both declined by 0.1%. This week’s earnings reports from Citigroup C, JPMorgan JPM, and Wells Fargo WFC are highly anticipated. EUROSTOXX 50 futures FESX1! and FTSE futures Z1! both rose 0.1%, while French 10-year bond futures (FOATc1) dipped by 23 ticks or 0.21%.
Friday’s jobs report reinforced the likelihood of a September rate cut from the Federal Reserve, with futures (0#FF:) indicating a 77% chance of such a move . Market expectations now include 53 basis points of easing for the year, up from about 40 basis points a month ago. Treasuries rallied following the report, with 10-year yields US10Y falling to 4.30%, down from a peak of 4.4930% early last week.
In currencies, the euro dipped slightly to $1.0828 EURUSD, down from $1.0843 on Friday, impacted by a soft U.S. jobs report. It also fell 0.25% against the Swiss franc to 0.9680 EURCHF but held steady against the yen at 174.00 EURJPY. The dollar was at 160.70 yen USDJPY, just below its recent high of 161.86.
In commodity and agricultural commodity markets, GOLD remained near one-month highs at $2,385 an ounce. Oil prices dipped as the market awaited the impact of Hurricane Beryl on Gulf of Mexico supplies, with Brent BRN1! down 14 cents to $86.40 a barrel and U.S. crude CL1! falling 29 cents to $82.87 per barrel. Three-month copper on the LME HG1! lost 0.2% to $9,925.50 per metric ton. The CBOT corn ZC1! lost 0.4% to $4.22-1/4 a bushel, and soybeans ZS1! was 0.8% lower to $11.20-3/4 a bushel. The most-active wheat contract on the CBOT ZW1! traded 0.7% lower at $5.86-1/4 a bushel.
Looking ahead this week, markets significant events include U.S. CPI data, Fed Chair Powell’s testimony, and major corporate earnings reports. On the same day, Germany will release its inflation data, and China will publish consumer prices and trade figures.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team