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Markets Update: APAC stocks tumbled and bond yields surged globally on Thursday as inflation worries intensified, with the Australian market particularly hard-hit after a surprising inflation rise, while the weakening yen heightened speculation of intervention by Japanese authorities.
Economic Calendar
Global Markets Roundup: 27 June 2024
APAC shares tumbled and bond yields surged on Thursday, driven by inflation worries, while the yen's depreciation past 160 per dollar heightened anticipation of potential intervention by Japanese authorities. In after-hours U.S. trading, Micron Technology's shares fell 8% after the chipmaker met, but did not exceed, high revenue expectations. Japan's Nikkei index dropped 1%.
Both FTSE futures and European futures were down 0.2%. The MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.7%, with significant losses in Australia, where rate-sensitive stocks dropped following a surprising rise in inflation data on Wednesday. Nasdaq futures NQ1! fell 0.4%. Japan's Nikkei NI225 dropped for 1%. FTSE futures Z1! and European futures FESX1! were trading both 0.2% lower. Australia XJO plummeted, as inflation hit six month high.
Australian three-year government bond yields soared 18 basis points on Wednesday after inflation hit a six-month high in May, rising an additional 7 basis points on Thursday to 4.18%, influenced by an overnight sell-off in U.S. Treasuries. Swaps markets now price about a 40% chance of a 25 basis points rate hike by Australia's central bank in August, up from around 10% before the inflation data release. Australia's unexpected inflation jump, coupled with a similar rise in Canadian inflation, added to market anxieties ahead of the Federal Reserve's preferred U.S. inflation measure due on Friday.
In foreign exchange markets, U.S. yields bolstered the dollar, especially against the yen and yuan, where the yield gap is most pronounced. China's yuan USDCNY fell to a seven-month low of 7.689 per dollar, influenced by the central bank's adjustment of the currency's trading band and data indicating a significant slowdown in industrial profit growth. The yen, which hit a lifetime low of 171.79 per euro EURJPY on Wednesday, remained fragile at 171.57 per euro. The dollar reached six-week highs against the pound GBPUSD and New Zealand dollar, with the USDJPY trading at 160.4 yen, just below a 38-year peak. Following overnight declines, the New Zealand dollar NZDUSD dipped another 0.1% to a six-week low of $0.6069, and sterling hit a six-week trough of $1.2613. The dollar index DXY reached a two-month high of 106.13 on Wednesday, up 1.3% for the month and almost 1.5% for the quarter, as expectations for U.S. rate cuts have been delayed due to persistent inflation and strong economic data.
In commodity/agricultural commodity markets, Brent crude BRN1! futures fell 0.2% to $85.07 a barrel, down 2.8% for the quarter. WTI crude futures CL1! lost 0.4%, to $80.59 per barrel. GOLD declined as yields increased, trading at $2,299 an ounce. Copper LME futures HG1! edged 0.2% higher at $9,558.50 per metric ton. Soybeans ZS1! was 0.2% higher to $11.09-1/2 a bushel. Corn futures ZC1! traded 0.4% lower to $4.23-3/4 a bushel. Wheat futures ZW1! remained near two-month lows, reflecting a good U.S. harvest and improved weather conditions in Russia. September New York cocoa CC2! lost 0.7% to $7,790 a ton.
Thursday's agenda includes the final U.S. GDP reading, European confidence figures, a speech from Australia's deputy central bank governor, and a rate decision in Sweden, all preceding the first U.S. Presidential debate.
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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