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Markets Update: Asian markets rose Tuesday, led by Japan, but investor caution persists amid Fed uncertainty. Oil fell after recent gains, gold rose as a safe haven.
Economic Calendar
Global Markets Roundup: 13 August 2024
On Tuesday, Asian stock markets saw an increase, driven primarily by Japanese shares supported by a stable yen. Traders closely monitored upcoming data releases, such as the U.S. inflation report, to gauge the Federal Reserve's policy direction after the volatile market movements of the previous week.
At the start of trading, oil prices experienced a slight drop following a 3% surge in the previous session, as investors kept an eye on escalating conflicts in the Middle East that could impact global crude oil supplies. The demand for safe-haven assets led to a rise in gold prices. The Nikkei index in Japan surged over 2% at the opening after a public holiday on Monday, providing relief following the turbulent swings of the previous week caused by a sharp yen appreciation and concerns about a U.S. economic downturn. Outside Japan, the MSCI's broadest index of Asia-Pacific shares was slightly up at 556.19, with Chinese stocks showing minimal movement and Hong Kong's Hang Seng Index remaining relatively stable.
Despite this, investor sentiment remained fragile, with the yen trading at 147.16 per dollar on Monday, reaching a seven-month high of 141.675 the previous week. The unexpected rate hike by the Bank of Japan last month surprised investors, leading to an exodus from popular carry trades reliant on the yen's low borrowing rates for investing in dollar-denominated assets. The upcoming week is data-heavy, focusing on various U.S. economic indicators that will shed light on the Federal Reserve's future policy decisions. Market expectations are split between a 25 basis points cut and a 50 bps cut at the next Fed meeting in September, with traders factoring in a total of 100 bps of cuts for the year.
The U.S. producer price data for July is expected to impact market movements, particularly concerning the Fed's preferred core personal consumption measure. Any signs of subdued inflationary pressures could reinforce expectations of aggressive rate cuts by the Fed, potentially affecting the dollar's performance.
In the commodities market, Brent crude futures eased by 0.56% to $81.84 a barrel, while U.S. West Texas Intermediate crude futures slipped to $79.61 a barrel in early trading. Brent had gained over 3% the previous day, while U.S. crude futures had risen by more than 4%. Spot gold prices are currently hovering near the record high of $2,483/oz.
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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