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Markets Update: Asian stocks rose on Tuesday as investors anticipated a potential Federal Reserve rate cut, while thin trading due to holidays in China and South Korea, a strong yen affecting Japanese exporters, and mixed performances across various indices reflected broader economic concerns and market reactions.
Economic Calendar
Global Markets Roundup: 17 September 2024
Asian stocks rose on Tuesday as the dollar and U.S. Treasury yields faced downward pressure. Investors were anticipating the Federal Reserve's upcoming easing cycle, which may include a significant rate cut. Thin trading conditions were observed due to extended holidays in China and South Korea, with attention turning to Wednesday's Fed decision. The likelihood of a 50-basis-point rate cut has increased over the past week.
The yen's strength raised concerns over the earnings of Japanese exporters, causing Tokyo's Nikkei NI225 to drop by 2% as the market reopened after a national holiday on Monday. In other parts of Asia, MSCI's most comprehensive index of Asia-Pacific shares (.MIAPJ0000PUS) increased by 0.47%. Hong Kong's Hang Seng Index HSI surged by 1.44%. S&P 500 futures ES1! and Nasdaq futures NQ1! both experienced slight declines, while EUROSTOXX 50 futures FESX1! rose by 0.33% and FTSE futures Z1! gained 0.57%.Â
Currently, there is a 67% probability in the markets that the Federal Reserve may reduce interest rates by 0.5% at the end of its monetary policy meeting on Wednesday. This expectation has been fueled by numerous media reports suggesting the likelihood of a more forceful easing approach. Investors have already priced in around 120 basis points of rate cuts by December. The two-year U.S. Treasury yield, typically reflecting short-term rate projections, was at 3.5547%, marking a decrease to a two-year low of 3.5280% during the previous session.The standard 10-year US10Y yield remained relatively stable at 3.6232%.
Both the Bank of England (BoE) and the Bank of Japan (BOJ) are scheduled to convene this week for discussions on monetary policy, with expectations that both central banks will maintain current interest rates. The dollar remained close to its lowest point in more than a year compared to the yen USDJPYÂ at 140.64, after dropping below the 140-yen mark in the last trading session. Compared to the Federal Reserve, the BoE is anticipated to pursue a less aggressive approach to easing, which has helped bolster the British pound GBPUSD. The currency was recently down by 0.1% at $1.3202, remaining close to its peak of $1.3269 in August, marking its strongest level since March 2022.
In other parts of Asia, the sluggish economic recovery in China continued to impact confidence, following reports that the country's industrial output growth hit a five-month low in August, along with further weakening in retail sales and new home prices. Nevertheless, worries about declining Chinese oil demand were eclipsed by the ongoing effects of Hurricane Francine on production in the U.S. Gulf of Mexico, causing oil prices to climb on Tuesday.
The price of Brent crude futures BRN1! increased by 0.44% to reach $73.07 per barrel, and U.S. crude futures CL1! went up by 0.67% to $70.56 per barrel. Meanwhile, the value of Spot GOLD dropped by 0.22% to $2,576.84 per ounce. The primary wheat contract on the Chicago Board of Trade (CBOT) ZW1! saw a 0.3% increase to $5.80 per bushel at 0121 GMT, whereas CBOT corn ZC1! decreased by 0.1% to $4.10-1/2 per bushel and soybeans ZS1! slipped by 0.1% to $10.04 per bushel. December arabica coffee KC2! closed 0.3% lower at $2.5855 per lb, changing direction after reaching its highest point since 2011 at $2.7180 earlier in the session. Meanwhile, November robusta coffee RC2! ended 0.4% down at $5,246 per metric ton, hitting a peak of $5,486, the highest level seen since the contract began trading 16 years ago.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team