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Thursday Morning Coffee - Markets Update - 24 October 2024 - Asia Shares Dip Amid US Election Anxiety, Tesla Earnings Offer Relief


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Markets Update: Tesla's strong earnings outlook slightly eased market jitters amid U.S. election uncertainty, rising bond yields, and a strong dollar, while stocks in Asia mostly declined.

 

Global Markets Roundup: 24 October 2024


FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!


On Thursday, Asian stocks declined as uncertainty surrounding the U.S. election outcome kept investors on edge, leading to the dollar maintaining near three-month highs and U.S. yields increasing. Despite this, Tesla's better-than-expected earnings outlook brought some relief to the market. The combination of elevated U.S. Treasury yields, election ambiguity, and speculation about the Federal Reserve's cautious approach to monetary policy limited risk appetite. Additionally, mounting expectations of a potential reelection of Donald Trump added to market jitters. Tesla's shares (TSLA) surged by 12% in after-hours trading following the company's strong third-quarter profits and its surprising forecast of a 20-30% sales growth for the next year.


Nasdaq futures with the symbol NQ1! increased by 0.5%, while S&P 500 futures represented by ES1! were up by 0.2%. U.S. stocks had experienced a three-day decline, particularly in the notable Magnificent Seven tech stocks, ahead of their earnings announcements. For instance, Nvidia (NVDA) witnessed a nearly 3% decrease. In Asia, Tokyo's Nikkei index (NI225) recovered from earlier losses and rose by 0.2%. The MSCI's comprehensive index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) declined by 0.3%, influenced by drops in Chinese stocks. Hong Kong's Hang Seng index (HSI) declined by 1.3%, while China's blue chips (3399300) fell by 0.8%. FESX1! | Z1! | NI225 | NQ1! | ES


It is concerning that U.S. bond yields are continuing to rise, with the key 10-year Treasury yields US10Y increasing by 16 basis points this week to 4.23%, approaching its highest level in three months of 4.260%. Although U.S. yields remained stable during early Asian trading, bonds in the region experienced a continued decline, as seen with Australian 10-year bond futures (YTCc1) dropping for a third consecutive day to 95.50, the lowest since May. Despite this trend, the release of positive economic data has prompted traders to question whether the Federal Reserve can justify significant rate cuts at its two remaining meetings this year. Market swaps currently suggest a modest 40 basis points of easing for the year.


In the foreign exchange markets, the dollar has remained well supported near its three-month peak due to higher yields. It rose by 1.1% against the yen USDJPY overnight, surpassing the key 153 level, but has now retreated to 152.655. The yen depreciated broadly following Bank of Japan Governor Kazuo Ueda's statement that achieving the central bank's inflation target was still a lengthy process. Both the euro and the Australian dollar reached their highest levels against the yen in three months overnight. The euro EURUSD dipped to a nearly four-month low of $1.07612 overnight, and is currently trading at $1.079075. The pound GBPUSD remained stable at $1.29255, after dropping to a more than five-week low of $1.29080 in the previous session. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD


In commodities, The rise in the dollar reined in a stellar run in gold prices (=XAU), which fell more than 1% overnight from its record of $2,758.37 an ounce. It, however, climbed 0.2% on Thursday to $2,723.44. Brent crude futures BRN1, increased by 95 cents, equivalent to a 1.27% rise, reaching $75.91 at 0302 GMT. In parallel, U.S. West Texas Intermediate crude futures CL1, surged by $1, or 1.41%, to $71.77. On Wednesday, the December ICE NY cocoa (CCZ24) recorded a decrease of -139 (-1.95%), while the December ICE London cocoa #7 (CAZ24) experienced a decline of -68 (-1.25%). The soybean contract with the highest trading volume on the Chicago Board of Trade (CBOT) ZS1! saw a 0.3% rise to $10.01-3/4 per bushel, marking its highest level since October 16. Wheat ZW1! also increased by 0.2% to $5.79-3/4 per bushel, and corn ZC1! edged up by 0.1% to $4.19-1/2 per bushel. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!


Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.



 

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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