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Markets Update: On Wednesday, Asian and U.S. stock markets declined, and the dollar weakened after a contentious U.S. presidential debate. The debate, featuring Harris and Trump, intensified investor anxiety ahead of upcoming inflation data. The dollar index fell, the yen strengthened, and oil prices stabilized near three-year lows.
Economic Calendar
Global Markets Roundup: 4 September 2024
SPX | CL1! | GOLD | FESX1! | SXXP | HSI | NI225 | EURUSD | AUDUSD | USDJPY | NZDUSD | DXY| ZW1! | KC1!
On Wednesday, Asian stocks and U.S. stock futures experienced declines, while the dollar weakened following a lively U.S. presidential debate between Vice President Kamala Harris and Republican Donald Trump that left investors anxious. The debate, which was the first of its kind and marked by contentious exchanges over abortion, the economy, immigration, and Trump's legal issues, made investors nervous ahead of upcoming U.S. inflation data that could impact the Federal Reserve's policy decisions next week.
The MSCI's index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) fell by 0.3%, S&P 500 futures ES1! declined by 0.5%, and the dollar was under pressure, with the yen USDJPY climbing over 1% to reach eight-month highs. European stock markets were expected to open softly, with Eurostoxx 50 futures FESX1! down by 0.19%, German DAX futures DAX1! remaining stable, and FTSE futures Z1! decreasing by 0.17%. Japan's Nikkei plummeted by nearly 2%, Chinese stocks continued to decline, with the Shanghai Composite index 000001 down by 0.92% and the blue-chip index 3399300 easing by 0.46%. Hong Kong's Hang Seng index slipped by 1.4%.
Harris' late entry into the presidential race following President Joe Biden's withdrawal in July has intensified the competition, leading to a reversal of trades made in anticipation of a second Trump presidency. Investors are closely monitoring the candidates' fiscal policies and economic plans, but the debate lacked specific details. Betting markets shifted in favor of Harris after the event, with pop superstar Taylor Swift announcing her support for Harris in the November 5 election.
The dollar index DXY, which measures the U.S. currency against six peers, decreased by 0.3% to 101.34, while the yield on the benchmark U.S. 10-year Treasury note US10Y dropped by 2.4 basis points to 3.62%.
Investors are now awaiting the U.S. Labor Department's consumer price index report later on Wednesday for policy insights, although the Federal Reserve has emphasized that employment is currently a higher priority than inflation.
The headline CPI is anticipated to have increased by 0.2% on a month-on-month basis in August, according to a Reuters poll, matching the previous month's figure. While a rate cut by the Fed is widely expected next week, the magnitude of the cut remains uncertain, especially after a mixed labor report last Friday failed to provide a clear direction for the central bank.
Markets are currently pricing in a 65% probability of a 25 basis points rate cut by the U.S. central bank, with a 35% chance of a 50 bp cut when the Fed announces its decision on September 18, as indicated by the CME FedWatch tool.
The dollar remained under pressure, with the yen USDJPY strengthening by over 1% to 140.71 per dollar, reaching its highest level since late December. The yen was also supported by comments from Bank of Japan board member Junko Nakagawa. Nakagawa reiterated in a speech that the central bank would continue to raise interest rates if the economy and inflation align with its forecasts.
In the commodities market, oil prices stabilized on Wednesday after a more than 3% drop in the previous session but remained near three-year lows following a downward revision of demand forecasts by OPEC+ for this year and 2025. Brent crude futures BRN1! were up by 0.43% at $69.49 per barrel. U.S. West Texas Intermediate (WTI) crude CL1! rose by 0.46% to $66.03 per barrel.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team