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Monday Morning Coffee - Markets Update - 7 October 2024 - Japan Takes the Lead in Asian Stock Market Rally Amid Dollar Strength Following US Payroll Growth

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Markets Update: Robust job growth in the US alleviates concerns about an economic downturn. Traders are retracting their expectations for a 0.5% interest rate cut in November. The dollar reaches a new seven-week peak against the yen. Oil prices retreat from a one-month high following the best week in a year.

 

Global Markets Roundup: 7 October 2024



Asian stocks surged and the dollar hit a new seven-week high against the yen on Monday following robust U.S. labor data that eased recession concerns and led to a significant reduction in rate-cut expectations. Short-term U.S. Treasury yields increased after the highly anticipated non-farm payrolls report on Friday revealed that the economy added more jobs than expected in September, marking the largest gain in six months. Despite Israel's military actions in Lebanon and the Gaza Strip, crude oil prices retreated from a one-month peak, coinciding with the one-year anniversary of the Hamas attack that sparked a conflict.


Japan's Nikkei NI225 led the regional equity rally with a 2% surge as of 0015 GMT, benefiting from the weaker yen. Australia's stock benchmark XJO rose by 0.12%, while South Korea's Kospi KOSPI gained 0.29%. Trading had not yet begun on Hong Kong's Hang Seng HSI, and Chinese mainland stocks were closed until Tuesday for the Golden Week holiday. MSCI's broadest index of Asia-Pacific shares (.MIAP00000PUS) climbed by 0.4%. U.S. Dow futures (YMc1) indicated a 0.08% increase after the cash index closed at a record high post the payrolls report on Friday. FESX1! | Z1! | NI225 | NQ1! | ES1!


In currencies, The U.S. dollar rose to 149.10 yen USDJPY, its highest level since Aug. 16, before settling at 148.87 yen, up 0.18%. Japan's chief currency diplomat, Atsushi Mimura, announced on Monday that officials would monitor foreign exchange movements, including speculative trading. The euro EURUSD dipped by 0.07% to $1.0971, approaching Friday's seven-week low of $1.09515. EURUSD | USDJPY


Expectations for a 50-basis-point rate cut by the Federal Reserve at the upcoming policy announcement on Nov. 7 - which stood above 50% a week ago - were completely eliminated following the payrolls report. Traders are now placing a 95% probability on a quarter-point cut, with a slight chance of the policy rate remaining unchanged, as per CME Group's FedWatch Tool. The two-year U.S. Treasury yield (US2YT=RR) climbed by 1.7 basis points to 3.9488% on Monday, the highest level in over a month.


In commodities, Gold slipped by 0.1% to $2,649.29 per ounce, but remained close to last month's peak of $2,685.42. Crude prices retreated after registering their largest weekly gains in over a year amidst escalating tensions of a potential conflict in the Middle East region. Brent crude futures BRN1! dropped by 65 cents to $77.40 per barrel, while U.S. West Texas Intermediate crude futures CL1! decreased by 53 cents to $73.85 per barrel. The primary corn contract on the Chicago Board of Trade (CBOT) ZC1! was trading 0.7% lower at $4.22 per bushel, hitting its lowest level since September 30 at $4.21 per bushel earlier in the session. Soybeans declined by 1% to $10.27-1/2 per bushel, falling to $10.27 per bushel earlier on Monday, marking the weakest point since September 23. Meanwhile, wheat ZW1! dropped by 0.8% to $5.85-1/4 per bushel. 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

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