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Wednesday Morning Coffee - Markets Update - 29 January 2025 - Dollar Strengthens, Tech Stocks Rebound, Federal Reserve Meeting Commences

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Markets Update: APAC markets exhibited strength as technology shares rebounded, with the dollar remaining firm amid impending Trump tariffs. Reduced trading volumes were observed due to Lunar New Year holidays across several Asian markets.

 

Global Markets Roundup: 29 January 2025


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

 

Equity Markets

Technology stocks led the gains in Asia-Pacific markets on Wednesday, reflecting the advancements seen on Wall Street. Investor concerns over the emergence of a competitive Chinese AI model subsided, reinforcing the dominance of U.S. industries. The dollar benefited from a rotation away from safe-haven currencies like the Japanese yen, bolstered further by new tariff warnings from the Trump administration.


Trading activity was lighter due to the Lunar New Year holidays affecting exchanges in mainland China, Hong Kong, Taiwan, Singapore, and South Korea. Japan's Nikkei share average increased by 1%, breaking a three-day losing streak, while Australia's stock benchmark climbed 0.6%, led by a 1.8% rise in technology sub-indices. U.S. S&P 500 futures indicated a 0.2% rise, with NASDAQ futures pointing to a 0.4% gain, following a significant 2% rally. Investor focus now shifts to earnings reports from major tech companies including Meta Platforms, Microsoft, and Tesla, scheduled for release later in the day. Additionally, the Federal Reserve is set to announce its policy decision, with expectations for interest rates to remain unchanged.


Currencies

The dollar index DXY, which assesses the currency against six principal counterparts, remained steady at 107.91 after two consecutive days of 0.2% gains. It concluded the previous week with a 0.6% decline as market participants anticipated that President Trump's tariffs would be less severe than initially feared. The Mexican peso slightly appreciated to 20.5169 per dollar, and the Canadian dollar also showed marginal strength at C$1.4394 against the greenback. The yuan increased by 0.2% in offshore trading, reaching 7.2597 per dollar. The euro EURUSD inched up to $1.0442, while the British pound advanced by 0.2% to $1.2462. The yen strengthened by 0.2% to 155.24 per dollar, supported by minutes from the Bank of Japan's December policy meeting, which indicated ongoing monetary tightening. Conversely, the Australian dollar declined following a lower-than-expected consumer inflation report, suggesting the possibility of an interest rate cut next month, thus dropping by 0.4% to $0.6229. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD


Commodities

Oil prices experienced a slight decline, with Brent crude futures falling 0.2% to $77.35 per barrel after a 0.5% increase the previous day. U.S. West Texas Intermediate crude futures decreased by 0.1% to $73.70, following a 0.8% rise on Tuesday. Gold prices XAUUSD stayed strong early Wednesday as attention turned to the upcoming Federal Reserve interest rate decision. The precious metal hovered around $2,760 to $2,770 per ounce.


In agricultural commodities, on Wednesday, global arabica coffee prices reached unprecedented levels, exceeding $3.60 per pound. This surge is primarily attributed to Brazil, the world's largest coffee producer, facing a limited supply of beans and ongoing concerns regarding its forthcoming harvest. Consequently, arabica coffee futures on the ICE exchange (KC1!) achieved a new peak at $3.6490 per pound, marking an approximate 15% increase year-to-date. Currently, these futures are trading at $3.6380 per pound, reflecting a 1.7% rise. In contrast, robusta coffee futures (RC2!), typically a less expensive variety predominantly utilized for instant coffee, increased by 0.6%, reaching $5,553 per metric ton. In other commodity movements, raw sugar (SB1!) rose 0.4% to 19.30 cents per pound, recovering significantly from last week's five-month low. White sugar (SF1!) increased by 0.9%, priced at $516.10 per ton. New York cocoa futures (CC2!) experienced a 2% rise, reaching $11,409 per ton. London cocoa (C1!) saw an increase of 0.8%, now priced at £9,113 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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