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Markets Update: Asian markets experienced a significant rebound on Tuesday, led by a surge in Tokyo's Nikkei index, after a severe sell-off the previous day, with reassuring comments from central bank officials and a stronger-than-expected US ISM services index helping to alleviate investor concerns and stabilize markets.
Economic Calendar
Global Markets Roundup: 6 August 2024
Stocks in Tokyo experienced a significant surge on Tuesday, leading to a broader recovery in Asian markets after a sharp decline. Reassuring statements from central bank officials played a pivotal role in alleviating investor concerns.
The Nikkei 225 index NI225 soared by over 10%, closing above 34,500 after a steep drop to 31,458 on Monday. This rebound is notable considering the 12.4% decline in the previous session, the most severe since the 1987 Black Monday crash. MSCI's comprehensive index of Asia-Pacific shares outside Japan increased by 2.0%, indicating a recovery throughout the region. Wall Street also displayed signs of stabilization, with S&P 500 ES1! futures rising by 1.5%, Nasdaq futures NQ1! up by 2%, and Euro Stoxx 50 FESX1! futures advancing by 1.24%. On Monday, the S&P 500 SPX decreased by 3.00%, and the Nasdaq Composite IXIC dropped by 3.43%, as global markets reacted to fears of an imminent U.S. recession.
U.S. Treasury yields experienced a slight uptick, with 10-year notes (US10Y) returning to 3.84% after falling to 3.667% earlier. Federal Reserve officials, notably Fed San Francisco President Mary Daly, aimed to reassure markets by emphasizing the importance of averting a labor market downturn and expressing readiness for interest rate cuts if necessary.
The rebound of the U.S. ISM services index to 51.4 for July, particularly the 5-point increase in the employment index to 51.1, suggests that the weakness in the labor market might have been overstated in last week's payrolls report. This data contributed to the stabilization of market sentiment. Despite market expectations of a 50 basis point rate cut by the Fed in September, with futures indicating a 71% probability, gold did not attract safe-haven demand.
In the currency markets, the dollar rose to 145.64 yen USDJPY after dropping sharply to 141.675 on Monday as investors exited carry trades. The dollar also recovered some losses against the Swiss franc, stabilizing at 0.8546 francs (USDCHF from a low of 0.8430. Sterling declined by 0.3% to $1.274 against the GBPUSD pair. The Australian dollar AUDUSD remained unchanged at $0.6492, following an initial increase prompted by remarks from Reserve Bank of Australia Governor Michele Bullock indicating that rate cuts were not imminent.
In the commodity markets, oil prices also rebounded, with U.S. West Texas Intermediate crude CL1! futures climbing by $1.18, or 1.6%, to $74.12 per barrel, amid concerns of a broader conflict following an attack on a U.S. military base in Iraq that resulted in injuries to several personnel. Spot GOLD was priced at $2,409 per ounce after a 1.52% decline. The LME copper HG1! contract has increased by 0.8% to reach $8,962.50 per ton.
The soybean contract with the highest trading volume on the Chicago Board of Trade (CBOT) ZS1! experienced a 1.3% decrease, settling at $10.27-1/2 per bushel. Corn ZC1! saw a 0.9% decline to $4.03-1/4 per bushel, while wheat ZW1! dropped by 0.8% to $5.35-1/4 per bushel. September robusta coffee RC1! finished the session down by $52, or 1.2%, at $4,175 per ton after reaching a 2-1/2 month low of $4,065. September arabica coffee KC1! declined by 2.1% to $2.257 per lb, after touching a 1-1/2 month low of $2.21 per lb. The October raw sugar SB1! closed 0.02 cents lower, or 0.1%, at 18.08 cents per lb after hitting a nearly two-year low of 17.64 cents. October white sugar SF1! remained relatively steady at $515.90 per metric ton, following a more than two-year low of $506.50.
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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