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Markets Update: While Asian markets were mixed and the yen stayed near a multi-year low on hawkish Fed comments and a potential Bank of Japan policy shift, European markets are set to open higher with focus on US inflation data and central bank decisions later this week.
Economic Calendar
Global Markets Roundup: 26 June 2024
Asian-Pacific stocks experienced fluctuations on Wednesday as investors awaited critical U.S. inflation data. The yen remained close to the 160 per dollar mark, raising concerns about potential intervention by Japanese authorities.
Market Sentiment and Influences:
Hawkish remarks from Federal Reserve officials dampened risk sentiment, bolstering the U.S. dollar and diminishing near-term expectations for rate cuts. Australian consumer inflation surged to a six-month high in May, pushing the Australian dollar (AUD/USD) to its highest level in two weeks. The MSCI Asia-Pacific index (.MIAPJ0000PUS) remained relatively flat at 566.53, close to the two-year high of 573.38 achieved last week. The Nikkei 225 NI225 added 1.26%, while the TAIEX climbed for 0.48%. European stocks are set for a robust opening, with Eurostoxx 50 futures FESX1! up 0.4%, German DAX futures DAX1! 0.3% higher, and FTSE futures Z1! increasing by 0.2%.
Sector-Specific Movements:
Japanese and Taiwanese markets, led by chipmakers, showed gains in response to the Nasdaq's IXIC tech rally, with Nvidia (NVDA) recovering over 6% after a three-session decline that wiped out approximately $430 billion from its market value.
U.S. Monetary Policy Developments:
Federal Reserve officials emphasized patience regarding rate cuts. Governor Lisa Cook indicated a rate cut is feasible if economic performance aligns with expectations but did not specify a timeline. Governor Michelle Bowman suggested maintaining the current policy rate for some time might suffice to control inflation.
Market participants are pricing in 47 basis points of easing this year, with a 66% chance of a rate cut in September, according to the CME FedWatch tool. Traders are keenly awaiting Friday's U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, expected to show a decrease in annual growth to 2.6% in May.
Yen and Bank of Japan's Position:
The yen, having touched a 34-year low of 160.245 per dollar on April 29, previously led Tokyo to spend around 9.8 trillion yen to support the currency. The yen's recent decline follows the Bank of Japan's decision to delay reducing bond-buying stimulus until its July meeting.
Currency Market Movements:
The Australian dollar AUDUSD rose over 0.5% to $0.6685 after the inflation data, prompting speculation of a possible rate hike as early as August. The dollar index (DXY) remained steady at 105.66, while the euro (EURUSD) stood at $1.071075. The yen (USDJPY) was at 159.76 per dollar, nearing the critical 160 level, which could trigger another round of intervention.
Commodities/Agricultural Commodities Market Update:
Oil prices saw an uptick, with Brent futures BRN1! rising 0.45% to $85.39 per barrel, and U.S. West Texas Intermediate futures CL1! increasing by 0.53% to $81.26 per barrel. GOLD prices eased to $2,316.88 per ounce but remain up 12% this year, following a record high of $2,449.89 last month. Three-month copper on the LME HG1! lost 0.2% at $9,555.5. Corn ZC1! climbed 0.9% to $4.47 a bushel and soybeans ZS1! edged 0.6% up to $11.18-1/2 a bushel. September London cocoa CC2! ​​edged 0.3% up and closed, to 6,638 pounds per metric ton. August white sugar SF1! lost 1.5% to $561.70 a ton. September arabica coffee KC2! was trading 2.9% lower to $2.293 per lb.
Looking ahead today, markets anticipate, French Consumer Confidence, UK CBI Distributive Trades, US Building Permits Final, US New Home Sales, EIA Crude Oil Stocks Change, US Bank Stress Tests.
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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