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Tuesday Afternoon Report - Markets Update - 28 January 2025 - Record Equity Losses, Significant Currency Movements, and Commodity Market Shifts

Writer's picture: The Trade  Academy TeamThe Trade Academy Team

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Markets Update: The recent tariff announcement by President Trump has bolstered the dollar while weakening the euro. Market participants are exercising caution following the release of DeepSeek's new AI technology. Concurrently, the Federal Reserve has initiated its two-day policy meeting. Additionally, the yen has relinquished some of its previous gains.

 

Global Markets Roundup: 28 January 2025


FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!

 

Equity Markets

European equities reached a record high on Tuesday, driven primarily by gains in retail and utilities sectors following the stabilization of market conditions after the previous day’s sell-off triggered by Chinese AI startup, DeepSeek. The pan-European STOXX 600 index increased by 0.7%, surpassing the intraday peak recorded on January 24. Retail stocks surged by 2.1%, with notable gains in JD Sports, Kingfisher, and Howden Joinery, each rising by over 3%. Utilities also performed strongly, advancing by 1.9%, while the media sector rose by 1.4%. Following the previous session's downturn, the European technology index saw a recovery, climbing 0.6%. Alten, an engineering and technology consulting firm, experienced a 10% increase after announcing its annual results. Japan's Nikkei share average declined by more than 1% on Tuesday, primarily due to significant losses in chip-related stocks, following a substantial drop in the technology-focused Nasdaq index in the United States. However, gains in banking shares mitigated the early losses for the Topix. The Nikkei NI225 decreased by 1.39%, closing at 39,016.87. Meanwhile, the broader Topix TOPIX saw a marginal decline of 0.04%, ending at 2,756.9, after recovering from an earlier 0.8% loss. The Nasdaq index IXIC experienced its most significant single-day decline since December 18, driven by a sharp sell-off in U.S. chipmakers, led by Nvidia NVDA, following the emergence of a cost-effective Chinese artificial intelligence model.


Currency Markets

Concerns that tariffs will accelerate inflation have reduced expectations for U.S. rate cuts prior to the inauguration, thereby strengthening the dollar DXY. The euro EURUSD declined by 0.7% to $1.04155 while sterling GBPUSD last traded at $1.2425, down 0.6% for the day. The Canadian dollar USDCAD depreciated by 0.27% to 1.4412 per U.S. dollar. President Trump has indicated the possibility of imposing 25% duties on imports from Canada and Mexico starting February 1, with additional threats of tariffs on the EU and China. The dollar index DXY, which tracks the U.S. currency against six major currencies, rose by 0.2% to 108, recovering from its lowest level since mid-December of 106.96, which was observed the previous day. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD


Commodities

Crude oil futures are increasing after experiencing a decline yesterday, which coincided with stock market losses related to China's recent AI developments. Additionally protests at two Libyan oil export ports highlight persistent supply risks given the ongoing political instability in Libya. WTI has risen by 1.4% to $74.20 per barrel, while Brent has increased by 1.3% to $78.04 per barrel. Gold futures for April delivery rose by $14.70 to $2,780.90 per ounce, approaching Friday's peak of $2,806.60. This increase precedes the Federal Open Market Committee's two-day session, expected to conclude with no change to interest rates.


In the soft commodities market, New York cocoa futures experienced a decline on Tuesday due to improved crop prospects in Ivory Coast, attributed to favorable weather conditions. Conversely, arabica coffee prices increased, though they remained below the record high reached during the previous session. New York cocoa futures on ICE (CC2!) decreased by 0.5% to $11,157 per metric ton. London cocoa (C1!) fell by 0.9% to 8,974 pounds per ton. Arabica coffee (KC1!) rose by 0.4% to $3.5060 per pound, nearing the previous session's record high of $3.5555. Brazilian farmers appear hesitant to sell due to an uncertain outlook for the 2025/26 harvest following dry conditions in 2024, although recent weather has been more favorable. Robusta coffee (RC2!) declined by 0.3% to $5,403 per ton. Raw sugar (SB1!) increased by 0.4% to 19.25 cents per pound, recovering strongly after reaching a five-month low of 17.57 cents last week. White sugar (SF1!) rose by 0.2% to $508.10 per ton. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!


Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.



 

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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