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Markets Update: Traders are still discussing the likelihood of a 50 bps or 25 bps cut by the Fed. Strong U.S. retail sales briefly leaned towards a 25 bps cut. The dollar decreases against the yen, but 2-year Treasury yields slightly increase. Most Asian stocks are under pressure, with the Nikkei following the fluctuations of the yen.
Economic Calendar
Global Markets Roundup: 18 September 2024
SPX | CL1! | GOLD | FESX1! | SXXP | HSI | NI225 | EURUSD | AUDUSD | USDJPY | NZDUSD | DXY| ZW1! | KC1!
On Wednesday, the US dollar relinquished some of its gains from the previous day, while Asian stock markets exhibited a mixed performance as traders assessed the likelihood of a substantial interest rate cut by the Federal Reserve later in the day. The US currency notably declined against the yen, reversing a third of its increase from Tuesday, following unexpectedly strong US retail sales data that suggested reduced necessity for aggressive monetary policy easing by the Fed. Conversely, the euro strengthened, recovering nearly all of its losses from the preceding day. Throughout the Asian trading session, the probability of the Federal Reserve implementing a significant 50 basis points rate cut fluctuated, starting at 63% early in the day and then rising to 65% by 0137 GMT, as per data from LSEG. This marked a slight decrease from the 67% probability recorded around the same time on Tuesday.
Japanese stocks were the only ones to show significant gains in the region, as the Nikkei stock average NI225Â rose by 0.72% to recover from Tuesday's 1% decline, driven by the ongoing impact of the dollar-yen exchange rate. Mainland Chinese blue chips 3399300Â started the day unchanged after the holiday break, while Taiwan TWSE:TAIEX resumed trading 0.35% lower following a day off. Australia's key index XJOÂ remained relatively stable. Meanwhile, MSCI's broadest index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) dipped by 0.05%. Major markets like Hong Kong and South Korea were closed due to holidays. On Tuesday, Wall Street ended the day with minimal change, unable to maintain the initial momentum that led the S&P 500 and Dow to reach record intraday highs. S&P 500 futures ES1! indicated a 0.08% increase for Wednesday.
In currencies, the US dollar fell by 0.55% against the Japanese yen to 141.60 USDJPY, despite having surged by 1.26% the previous day. The euro EURUSDÂ increased by 0.12% to $1.1128. The dollar index DXYÂ slipped by 0.07% to 100.84, following a 0.3% gain on Tuesday. Meanwhile, short-term Treasury yields (US2YT=RR) continued to climb, with the two-year note's yield rising by one basis point to reach 3.6028% during Asian trading hours.
In commodities, GOLD found its feet, rising 0.15% to $2,573.18 per ounce after slipping back from an all-time high in the previous session. Crude oil was steady after gaining about $1 a barrel on Wednesday amid escalating tensions around the Middle East. U.S. crude futures CL1! eased 13 cents to $71.06 in the latest session, and Brent crude futures BRN1! edged down 14 cents to $73.56. Â
In agricultural commodities, December arabica coffee KC2! increased by 2.3% to reach $2.65 per lb, reaching its highest level since 2011 at $2.7180 on Monday. Meanwhile, November robusta coffee RC2! saw a 1.1% rise to $5,303 per metric ton, hitting a peak of $5,486 on Monday, the highest in nearly five years. On the other hand, December New York cocoa CC1! dropped by 1.9% to $7,620 per ton. The global cocoa market is experiencing its third consecutive year of deficit, with the global cocoa stocks-to-grinding ratio at its lowest point in almost half a century. Despite this, the possibility of production recovery in the next season is limiting cocoa's price increases. March London cocoa C2! also fell by 1.9% to 4,590 pounds per metric ton.
Looking ahead today, key events to watch for are the UK Consumer Price Index, Eurozone Harmonized Index of Consumer Prices (Final), US Building Permits, Central Bank of Brazil Policy Announcement, Bank of Canada Minutes, Supply Data from the UK and Germany, and the Federal Open Market Committee Policy Announcement and Press Conference.
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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