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Markets Update: Topix Hits Record High, S&P 500 Futures Steady - FTSE and Sterling Stable as UK Heads to Polls - Narrowing Odds on September Fed Rate Cut Following Soft Data
Economic Calendar
Global Markets Roundup: 4 July 2024
Asia-Pacific stocks reached a 27-month high on Thursday, buoyed by softer U.S. economic data that increased the likelihood of a September rate cut. This optimism bolstered bonds and commodities while weakening the dollar.
With U.S. markets closed for a holiday, trading volumes were thin. Investors eagerly anticipated the results of the UK election, where opinion polls have long forecasted a landslide victory for the Labour Party over the Conservatives. Across the English Channel, polls suggested the National Rally (RN) would not secure a majority in Sunday's French election as mainstream parties sought to block the far-right.
Market Movements
FTSE futures Z1! rose by 0.1%, while EUROSTOXX 50 FESX1! futures remained largely unchanged. The MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.9%, marking its highest level since April 2022. Japan's Nikkei NI225 rose 0.9%, nearing its March peak, while the broader Topix TOPIX reached an all-time high. Taiwan's main index also hit a record, driven by the tech sector and Taiwan Semiconductor Manufacturing Co (TSMC), which surpassed T$1,000 for the first time. S&P 500 ES1! and Nasdaq NQ1! futures were steady after hitting new records overnight, influenced by soft U.S. economic data.
The U.S. ISM measure of services activity unexpectedly dropped to its lowest since mid-2020, with employment notably weak ahead of the June payrolls report due on Friday. Despite this, analysts noted that price measures in both the ISM and PMI surveys indicated easing inflation.
Currency and Commodity Movements
With the U.S. economy appearing less robust, the dollar weakened across the board. The euro EURUSD rose to $1.0785, moving away from its recent low of $1.0666, while the dollar index hit a three-week low DXY. The Australian dollar AUDUSD reached a six-month peak at $0.6733 amid speculation of a potential rate hike. The yen, USDJPY however, continued to lag, hitting multi-year lows against several currencies as investors favored carry trades. The dollar stood at 161.53 yen USDJPY after reaching a 38-year high of 161.96 overnight. The sterling GBPUSD held steady at $1.2740
The dollar's decline benefited commodities, with GOLD rallying to $2,358 an ounce from $2,318 earlier in the week. Oil prices eased slightly, having risen overnight due to an unexpectedly large decline in U.S. crude stocks, suggesting stronger demand as the U.S. driving season begins. Brent crude BRN1! dipped 47 cents to $86.87 a barrel, while U.S. crude CL1! fell 53 cents to $83.35 per barrel. CBOT soybeans ZS1! fell to $10.97, its lowest since 2020.
Looking ahead today markets anticipate, German Factory Orders, UK General Election, Brazil Balance of Trade. US Markets Closed.
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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