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Markets Update: Global tensions and economic uncertainties, including Middle East conflicts, oil supply disruptions, and Nvidia's earnings, rattled Asian markets on Tuesday. Investors sought safe havens, while the dollar remained steady. The market awaits the Federal Reserve's next move on interest rates and crucial economic data.
Economic Calendar
Global Markets Roundup: 27 August 2024
Asian markets took a hit on Tuesday as a cocktail of geopolitical tensions and economic uncertainties unnerved investors. As the world awaits the Federal Reserve's next move on interest rates and the highly anticipated earnings report from AI giant Nvidia, rising tensions in the Middle East and supply concerns in the oil market have further eroded confidence.
Gold prices hovered near record highs as investors sought safe havens, with the yen also strengthening to a three-week peak. The dollar held steady, reflecting the cautious mood as Israel and Lebanon's Hezbollah engaged in cross-border fire on Sunday, adding to the already volatile global landscape. Crude oil prices saw a slight dip after significant gains on Monday, driven by Libya's eastern-based government's decision to shut down all oil fields, halting production and exports.
Investor anxiety is palpable ahead of Nvidia's earnings report, expected on Wednesday. The chipmaker, central to the AI-driven rally in tech stocks, faces immense pressure to deliver a stellar forecast. A less-than-impressive outlook could rattle market confidence.
MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) declined by 0.48%, retreating from the one-month high reached in the previous session. European markets were poised for a modestly positive start, with Eurostoxx 50 futures inching up 0.08%, German DAX futures rising 0.13%, and FTSE futures gaining 0.35% as the London market reopened after a holiday. In China, the blue-chip CSI300 index fell by 0.61%, while Hong Kong's Hang Seng index (HSI) dropped 0.27%. The dip was largely attributed to underwhelming earnings from PDD Holdings, the parent company of Temu, which struggled with weaker consumer spending.
Adding to the pressure, Canada joined the United States and European Union in imposing a 100% tariff on Chinese electric vehicle imports and a 25% tariff on Chinese steel and aluminum, further straining trade relations. In a highly anticipated address, Federal Reserve Chair Jerome Powell signaled the start of interest rate cuts, with markets now focusing on the Fed's September meeting. "The Powell speech provided a temporary boost," said Ben Bennett, Asia-Pacific investment strategist at Legal & General Investment Management. "But now, all eyes are on the PCE data this Friday and the preliminary European inflation numbers later this week."
The U.S. personal consumption expenditure price index, the Fed's preferred measure of inflation, due on Friday, and the August payrolls report next week will be key data points for investors. The market is already pricing in a 25-basis-point rate cut from the Fed next month, with a total of 100 bps in cuts expected by the end of the year.
The yen (USDJPY) settled at 144.645 per dollar, easing from its previous session's safe-haven gains, where it had touched a three-week high of 143.45 per dollar. Meanwhile, the dollar index (DXY) remained relatively unchanged at 100.84, close to the 13-month low of 100.53 reached in the previous session.
Oil prices moderated in early Tuesday trading after Monday's 3% spike, driven by fears of supply disruptions due to the escalating Middle East conflict and Libya's production cuts. Brent crude futures dipped 0.21% to $81.26 per barrel, slightly below Monday's two-week high of $81.58. U.S. crude futures eased 0.32% to $77.17 per barrel, just off the one-week high of $77.60 hit overnight. Gold prices edged down by 0.39% to $2,507.12 per ounce on Tuesday, just shy of the record high of $2,531.60 reached on August 20. The market's current volatility underscores the deepening sense of unease as global risks mount. "Chicago corn futures remain near a four-year low due to expectations of record U.S. production. Soybeans and wheat prices are also affected by ample global supplies. Corn ticks up on bargain-buying, but soybeans and wheat ease. Coffee prices rose 1% due to tight supplies and reduced global stocks, especially of robusta coffee. There's potential for further price increases, and some light rains are expected in top grower Brazil. Cocoa prices also surged 2.5% to hit a month-long high. #CoffeeMarket #CocoaMarket #Commodities 🌍☕️🍫
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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