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Markets Update: Asian markets surged on Thursday led by tech stocks and prospects of US rate cuts, while European markets are poised for a positive start as global markets react to dovish Fed comments and a stronger yen.
Economic Calendar
Global Markets Roundup: 1 August 2024
On Thursday, there was a significant increase in Asian markets, largely influenced by a strong rebound in technology stocks, particularly Meta and Nvidia. This rise coincided with a positive impact on global bonds and commodities due to the expectation of upcoming monetary policy adjustments in the United States.
European markets are set for a positive start, as EUROSTOXX 50 futures FESX1! are up by 0.2% and FTSE futures (Z1!) have risen by 0.3%. Nasdaq futures NQ1! have surged by 0.9%, driven by a 7% increase in Meta Platforms (META) shares in after-hours trading on the back of strong earnings. The MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) has gained 0.7%, bouncing back from a relatively flat performance in July. The regional MSCI IT index (.MIAPJIT00NUS) has soared by 2.0%, with Taiwan's TWSE:TAIEX also climbing by 1.8%. On the other hand, Japan's Nikkei NI225 has dropped significantly by 2.7% due to the yen's appreciation negatively impacting exporters.
Blue-chip stocks in China experienced a 0.3% decline after a private survey showed an unexpected contraction in the country's manufacturing sector in July, sparking worries about the continuity of economic growth. Meanwhile, tech stocks on Wall Street made a noteworthy comeback following a recent slump. Nvidia, a prominent player in AI technology, surged by 13%, contributing around $330 billion in market value on Wednesday. Market participants are eagerly anticipating the earnings releases from tech giants Apple and Amazon.com scheduled for later today.
Additional support for the worldwide rally came from the Federal Reserve Chair Jerome Powell's cautious comments, mentioning a serious consideration of a rate reduction in the upcoming July meeting. The central bank's position suggested that the risks to employment were now on par with those associated with increasing prices.
In the currency markets, the dollar depreciated against the yen and other major currencies, as the dollar index DXY dropped to 104.04, marking a 0.4% decrease from the previous day's level. The Japanese yen (USDJPY) surged to 148.48 per dollar before facing resistance, ultimately settling at 149.77, up by 0.2% following an overnight increase of 1.8%. This movement came after the Bank of Japan unexpectedly raised interest rates, only the second time in 17 years, indicating potential further tightening in the future. The EURUSD pair was trading near $1.0828, while the GBPUSD pair was hovering around $1.28485 ahead of the upcoming Bank of England policy decision. Even though the central bank has the choice to decrease rates, there is considerable uncertainty among both markets and economists.
Within the commodities market, the escalation of geopolitical tensions following the assassination of a Hamas leader in Iran led to a continuous surge in oil prices. Brent crude futures (BRN1!) climbed by 0.8% to hit $81.48 per barrel, with U.S. West Texas Intermediate crude futures CL1! also rising by 0.9% to $78.61 per barrel, building on the previous day's increase of around 4%. The price of GOLD remained steady at $2,446.68 per ounce. September, arabica coffee KC1! closed 1.6 cents lower, or 0.7%, at $2.292 per lb as Brazil's harvest surpassed 80% completion and export activities intensified. Meanwhile, October raw sugar SB1! ended the session 0.18 cents down, or 0.9%, at 18.94 cents per lb, following a peak at 19.32 cents.
Today, markets are looking forward to the BOE Interest Rate Decision, US Initial Jobless Claims, and US ISM Manufacturing PMI.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team