_edited_edited.png)
Markets Update: Asian stocks tumbled as global tech woes pushed investors to safe havens like bonds and the yen, despite China's surprise rate cut, with markets now fully pricing in a Fed easing by September due to the recent market turmoil and expectations of continued US economic growth.
Economic Calendar
Global Markets Roundup: 25 July 2024
Asian stocks plummeted on Thursday, driven by a sharp downturn in global tech shares that pushed investors toward safer assets such as short-dated bonds, the yen, and the Swiss franc. The decline came despite China's central bank unexpectedly cutting long-term rates in an effort to bolster the economy, adding to a series of recent stimulus measures. This surprise move provided little relief to Chinese markets.
As a result, investors are now overwhelmingly betting on global rate cuts, with futures markets pricing in a 100% chance of a Federal Reserve easing in September. This market turmoil has led to increased volatility, causing a significant squeeze on carry trades and sending the dollar down 0.6% to 152.85 yen on Thursday.
Global Markets Overview:
MSCI Asia-Pacific (excluding Japan) Index: -0.7%
Japan's Nikkei NI225Â : -2.9%
South Korea's KOSPI: -2%
Hong Kong's Hang Seng HSI: -0.6%
Shanghai Composite Index 000001: -0.3%
Chinese Blue-Chips: -0.1%
Taiwan's markets remained closed for the second day due to a typhoon.
In early Asian trading, Nasdaq futures NQ1! rebounded by 0.4%, and S&P 500 futures ES1! rose by 0.3%.
On Wall Street, the Nasdaq experienced its worst one-day drop since 2022, falling nearly 4% due to disappointing earnings from Alphabet and Tesla. This decline further shook investor confidence in the high-flying "Magnificent Seven" stocks. The volatility index VIX spiked to a three-month high, with investors flocking to cash and short-term debt. U.S. two-year Treasury yields hit their lowest level in almost six months on Wednesday.
Short-dated bonds rallied following comments from Bill Dudley, who suggested the Federal Reserve should cut rates at its next policy meeting. The yield on two-year Treasuries fell 4 basis points overnight, stabilizing at 4.4121%. Markets are fully pricing in a quarter-point rate cut from the Fed in September, with some even considering a 50 basis point cut. For 2024, a total easing of 65 basis points has been priced in. U.S. GDP data, due later on Thursday, is forecast to show an annualized growth of 2% in Q2. The Atlanta Fed's GDPNow indicator suggests a higher growth rate of 2.6%, indicating potential upside risk.
In currencies, The yen surged 0.6% to its strongest level in two and a half months, climbing 1.1% overnight. This upward momentum is expected to continue ahead of the Bank of Japan's meeting next week, where rate hikes will be debated. The Swiss franc USDCHF also saw a 0.7% rise overnight. The euro lost 0.7% to 165.59 yen EURJPY, while sterling GBPJPYÂ and the Australian dollar AUDJPYÂ traded 0.85% and 1.3% lower against the Japanese currency, respectively. The Australian dollar AUDUSDÂ also lost 0.55% $0.6545, while the kiwi NZDUSDÂ in the same direction hit a 2-1/2-month low of $0.5913. The EURUSDÂ traded flat at $1.0839, while sterling GBPUSDÂ edged 0.12% lower to $1.2890.
Commodities/Soft Commodities Markets:
GOLD: -0.9% to $2,375.92 an ounce
Brent Crude BRN1!: -0.4% to $81.81 a barrel
WTI Crude CL1!: -0.3% to $77.33 a barrel
LME Copper HG1!: -1.9% to $8,933.50 per ton
LME Lead LEAD1!: -0.6% to $2,032.50 a ton
CBOT Soybean ZS1!: -0.3% at $10.61 a bushel
CBOT Corn ZC1!: -0.2% to $4.17 a bushel
CBOT Wheat ZW1! rose 0.1% to $5.47-1/2 a bushel.
Oil prices remained near six-week lows amid concerns over a slowing Chinese economy impacting demand.
Looking ahead today, markets anticipate French Business Confidence, German Ifo Business Climate, UK CBI Industrial Trends Orders, US Durable Goods Orders, US GDP Growth Rate, and US Initial Jobless Claims.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
Commentaires