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Markets Update: Despite early losses, Asian stocks recovered slightly on Tuesday, boosted by Wall Street's strong performance and anticipation of rate cuts by the Federal Reserve. However, concerns about China's economic challenges and trade tensions tempered market sentiment.
Economic Calendar
Global Markets Roundup: 10 September 2024
Despite early losses, Asian stocks managed to recover slightly on Tuesday after Wall Street's positive performance. However, worries about the ongoing challenges in the Chinese economy tempered overall market sentiment. The MSCI's comprehensive index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) increased by 0.2% recently, following a 1.11% decline in the previous session that led to a one-month low.
Japan's Nikkei NI225 closed 0.4% higher, supported by increases in financial and consumer sectors. Wall Street experienced a remarkable recovery overnight, as all three major U.S. stock indexes surged over 1%, bouncing back from the previous week's sell-off. The U.S. inflation report is scheduled for release on Wednesday, with expectations pointing to a further slowdown in the headline figure to an annual rate of 2.6% in August.
The Federal Reserve is highly likely to reduce rates at its upcoming meeting, with markets indicating a 29% probability of a larger 50-basis-point adjustment. Expectations already include around 110bps in cuts for the remainder of the year. (FEDWATCH) U.S. futures showed a mixed performance on Tuesday, with S&P 500 future ES1! increased 0.02%., but Nasdaq futures NQ1! edged 0.07% lower. EUROSTOXX 50 futures FESX1! added 0.23% whereas FTSE futures Z1! decreased by 0.16%.
Regarding currencies, the U.S. dollar was in a strong position, gaining 0.22% against the yen USDJPYÂ to 143.47. The euro EURUSDÂ was slightly lower at $1.1032, whereas the British pound GBPUSDÂ lost 0.06% to $1.30655.
CHALLENGES IN CHINA
In Asia, worries about China's economic growth prospects also dampened market sentiment. Recent data revealed that consumer inflation in the country surged in August to its highest level in six months, while domestic demand continued to be weak and producer prices fell further into deflation. As a result, Chinese stocks experienced a decline 3399300Â sliding to its lowest level in seven months in the previous session, the yuan USDCNYÂ was under pressure due to renewed calls from Beijing for additional stimulus measures to support its economy. Meanwhile, in the offshore market, the yuan USDCNH the rate was down by 0.04% to 7.1234 per dollar.
Trade data to be released later on Tuesday may provide further insights into the recovery pace of the world's second-largest economy. Hong Kong's Hang Seng Index HSI the previous session saw a slight increase of 0.22%, while the Hang Seng Mainland Properties Index HHSMPI declined by 0.2%, continuing its 3.5% drop from the day before. Further challenges for the Chinese economy arose from escalating trade tensions, following the passing of a bill by the U.S. House of Representatives on Monday. The bill aims to limit business activities with China's WuXi AppTec 603259, BGI, and other biotech firms on national security concerns.
In commodities, oil prices stabilized, as Brent crude futures BRN1! rose by 0.42% to reach $72.14 per barrel, with U.S. crude oil also experiencing an increase.e CL1! the price per barrel increased by 0.36% to $68.96. Spot gold GOLD Decreased by 0.03% to $2,504.34 per ounce.
In London, cocoa futures for December, represented by C2!, increased by 233 pounds, or 4.4%, closing at 5,490 pounds. Meanwhile, December New York cocoa (CC2!) surged by 5.6% to $7,475 per ton. Robusta coffee for November (RC2!) rose by $121, or 2.5%, to $4,891 per ton, although it remained below last week's peak of $5,180, the highest in over 16 years. Arabica coffee futures for December (KC2!) climbed by 4% to $2.454 per pound, following a 3.3% decline the previous week.
Raw sugar for October (SB1!) dipped by 0.08 cents, or 0.4%, to 18.83 cents per pound. White sugar futures for October (SF1!) dropped by 1.3% to $526.30 per ton. The soybean contract with the highest trading volume on the Chicago Board of Trade (CBOT) ZS1! decreased by 0.4% to $10.14 per bushel at 0327 GMT, following a 1.3% increase on Monday. Corn ZC1! dropped by 0.3% to $4.06 per bushel, while wheat ZW1! rose by 0.3% to $5.70 per bushel.
Looking ahead today, key events to watch out for are the final release of German Consumer Price Index, UK Unemployment and Wages data, Norway Consumer Price Index, Energy Information Administration Short-Term Energy Outlook, Organization of the Petroleum Exporting Countries Monthly Oil Market Report, statements by Bank of Canada Governor Macklem, as well as supply updates from the UK, Germany, and the US.
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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