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Markets Update: Despite some fluctuations in individual markets, Asian stocks remained near a two-year high on Thursday as investors awaited central bank decisions from the BoE, Switzerland, and Norway, with the BoE likely keeping rates unchanged while the Swiss National Bank is expected to cut rates and Norway to hold steady.
Economic Calendar
Global Markets Roundup: 20 June 2024
APAC stocks held steady on Thursday, remaining near a two-year high as traders awaited further policy signals from the U.S. Meanwhile, sterling remained stable ahead of the Bank of England (BoE) meeting, where rates are expected to stay unchanged. In addition to the BoE, investors are closely monitoring central bank decisions from Switzerland and Norway on Thursday, which will influence the global interest rate outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was largely unchanged at 572.42, just shy of the two-year high of 573.38 reached on Wednesday, buoyed by technology stocks. The index is poised for a 4% increase in June. European markets were set for a positive open, with Eurostoxx 50 FESX1! futures and FTSE Z1!futures both up 0.2% ahead of the central bank announcements. Data released on Wednesday showed British inflation returned to its 2% target in May for the first time in nearly three years. However, strong underlying price pressures suggest that an interest rate cut is unlikely ahead of the upcoming election next month.
A Reuters poll last week indicated that most economists expect the BoE to start cutting rates in August. However, markets currently see only a 30% chance of an August rate cut, with a first move more likely in September or November. Markets have priced in 43 basis points of easing from the BoE this year. The Swiss National Bank is anticipated to reduce its key policy rate by 25 basis points for the second consecutive meeting. Conversely, Norway's central bank is expected to maintain its key policy interest rate.
In Asia, Japan's Nikkei NI225 rose 0.10%, while stocks in China (3399300) and Hong Kong HSI declined, pressured by underperforming property shares. Beijing left its key benchmark lending rates unchanged despite recent data indicating economic instability. A surge in technology stocks on Tuesday propelled AI chipmaker Nvidia (NVDA) above Microsoft (MSFT) as the world's most valuable company, sparking a global rally in tech shares. U.S. markets were closed on Wednesday, with tech-heavy Nasdaq NQ1! futures up 0.5% on Thursday.
The enthusiasm over artificial intelligence has driven technology stocks higher this year, with Nvidia leading the charge alongside a few other giants, pushing U.S. stocks to record highs and boosting Asian counterparts. On the macroeconomic front, investors are seeking new cues on when the Federal Reserve might start its policy easing cycle, after the central bank projected only one rate cut this year and policymakers remained cautious this week.
In currencies, the Japanese yen USDJPY languished at 158.17 per dollar, weighed down by the significant interest rate differential between Japan and the U.S. The yen has depreciated over 10% against the dollar this year. The dollar index DXY, which measures the U.S. dollar against six major currencies, remained stable at 105.27, while the euro EURUSD held steady at $1.0746. The pound GBPUSD remained stable at $1.27125 in cautious trading but has declined 0.2% in June. The onshore yuan USDCNY weakened past 7.26 per dollar for the first time since November.
In commodities/agricultural commodities, oil prices were mixed. Brent crude BRN1! remained steady at $85.12 per barrel, while U.S. West Texas Intermediate crude for June CL1! fell 0.23% to $81.38 per barrel. GOLD was trading 0.6% higher at $2,341.15 per ounce. Three-month copper on the LME HG1! climbed 0.2% to $9,802 per metric ton. Corn ZC1! lost 0.6% to $4.47-1/2 a bushel. September London cocoa CC2! jumped 1.1% at 7,767 pounds per metric ton. September robusta coffee RRC2! edged 1.7% higher to $4,060 a ton.
Looking ahead today, markets anticipate, German PPI, BoE Interest Rate Decision, US Building Permits Prel, US Initial Jobless Claims, EU Consumer Confidence Flash, South Korea PPI.
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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