
Markets Update: U.S. stock futures and Asian shares excluding China experienced a downturn on Monday as investors contemplated the repercussions of DeepSeek's launch. Specifically, this Chinese startup has introduced a free, open-source artificial intelligence model poised to rival OpenAI's ChatGPT.
Global Markets Roundup: 27 January 2025
FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!
Market Impact
The introduction of DeepSeek's AI model by a Chinese startup has presented a notable challenge to ChatGPT, leading to a significant impact on the technology market and inviting scrutiny over company valuations. Concurrently, President Trump has imposed tariffs on Colombia in response to deportation issues, which has contributed to the strengthening of the dollar. Anticipation surrounds the upcoming meetings of the Federal Reserve and European Central Bank. Moreover, many Asian markets remain closed in observance of the Lunar New Year.
U.S. Tariffs and Dollar Strength
In parallel, the U.S. dollar appreciated following President Trump's imposition of retaliatory tariffs and sanctions on Colombia, which stemmed from the country's refusal to allow military aircraft carrying deported migrants. U.S. Nasdaq Composite futures plummeted by 1.8% at 0158 GMT, while S&P 500 futures declined by 0.9%.
Asian Markets' Performance
Japan's Nikkei index decreased by 0.3%, reversing earlier gains. Similarly, New Zealand's equity benchmark fell by 0.6%, and Singapore's Straits Times index dropped by 0.2%. Conversely, Hong Kong's Hang Seng index rose by 0.9%, and mainland blue chips increased by 0.2%, despite unexpected data showing a contraction in manufacturing this month.
Currency Movements
In currency markets, the dollar rose by 0.3% against the Chinese yuan in offshore trading, gaining 0.4% against the Australian dollar and 0.5% against the New Zealand dollar. These antipodean currencies often act as liquid proxies for China's currency due to close trade ties. The euro EURUSD slipped 0.2% to $1.0461. The pound GBPUSD dipped 0.1% to $1.2457. The yen USDJPY remained mostly steady at 156.13 per dollar. The Mexican peso depreciated by 1%, while the Canadian dollar eased by 0.3%. The Colombian peso has yet to trade against the dollar but had gained 3.4% over the previous three sessions.
Upcoming Market Events
This volatility sets the stage for a crucial week, with significant meetings of the Federal Reserve and European Central Bank on the horizon. Many markets remain closed for the Lunar New Year, with South Korea shut on Monday and Tuesday, and Taiwan closed for the entire week. Mainland China will observe holidays from Tuesday until the following Wednesday. Australia is also closed on Monday for Australia Day.
Commodities
Crude oil prices declined after Trump reiterated his call for OPEC to reduce oil prices. Brent crude futures dropped by 1.2% to $77.60 per barrel, while U.S. West Texas Intermediate crude fell by 1.2% to $73.78 per barrel. Gold prices decreased by 0.6% to $2,755.85 per ounce. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!
In agricultural commodities, the most active soybean contract on the Chicago Board of Trade (CBOT) ZS1! decreased by 1.4% to $10.41-1/4 a bushel. Earlier in the session, it fell to $10.40 a bushel, marking the lowest level since January 21. Wheat ZW1! declined by 1% to $5.38-3/4 a bushel, and corn ZC1! dropped 1.2% to $4.80-3/4 a bushel.
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