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Wednesday Morning Coffee - Markets Update - 9 October 2024 - The Pause in China's Red-Hot Surge: Anticipating Stimulus Impact

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

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Markets Update: Chinese stocks and commodities declined as investors grew cautious about China's economic recovery, while global markets remained optimistic about a U.S. soft landing and continued global demand, with the MSCI's wide-ranging index of Asia-Pacific shares excluding Japan rising 0.6% and Hong Kong stocks bouncing back after a significant drop.

 

Global Markets Roundup: 9 October 2024



Chinese stocks dropped on Wednesday and commodities suffered significant losses as investors became more cautious about a potential Chinese economic recovery. However, global markets remained stable, anticipating that the U.S. economy would steer clear of a recession and continue to drive global demand. The MSCI's wide-ranging index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) rose by 0.6%, with Hong Kong stocks bouncing back by around 2% after experiencing their most substantial decline since 2008 the previous day. Hong Kong markets took a hit on Tuesday, mainland Chinese stocks retreated from their peaks, and commodities like oil and metals declined after a press conference by China's National Development and Reform Commission failed to reveal any significant new stimulus measures.


The Shanghai Composite 000001 and the blue-chip CSI300 3399300 both dropped by approximately 3% on Wednesday. Meanwhile, Japan's Nikkei NI225 increased by 1%, driven by a surge in shares of convenience store Seven & I Holdings 3382 following reports from Bloomberg News that Canadian retailer Alimentation Couche-Tard ATD was planning to raise its buyout bid. In Asia, U.S. equity futures remained relatively stable, building on strong gains in the previous cash trading session, as several Federal Reserve officials expressed optimism about effectively managing interest rates to ensure a soft economic landing. FESX1! | Z1! | NI225 | NQ1! | ES1!


In the foreign exchange markets, the U.S. dollar has been supported by higher yields, causing it to slightly increase in value to $1.0968 per euro EURUSD, while remaining stable at 148.25 yen USDJPY. The Australian dollar AUDUSD showed a small decline to $0.6738, as traders considered the Reserve Bank of New Zealand's plans for potential future interest rate cuts. Following a 50 basis point interest rate reduction by the central bank and a negative economic outlook, the New Zealand dollar NZDUSD dropped by 0.6%, with the possibility of further cuts remaining open. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD


In commodities,     

Oil prices stabilized during Asian trading on Wednesday, with traders assessing the situation in the Middle East alongside persistent bearish demand forecasts. Brent crude futures BRN1! increased by 22 cents, or 0.3%, reaching $77.4 per barrel. Meanwhile, U.S. West Texas Intermediate futures CL1! climbed 14 cents to $73.71 per barrel. Gold remained steady at approximately $2,620 per ounce, marking its lowest point in more than two weeks. This stability was attributed to the continued strength of the US dollar, as market sentiments shifted towards a smaller rate cut by the Federal Reserve. The situation was influenced by positive US job figures that alleviated worries regarding a weakening job market. Currently, markets are indicating an 89% likelihood that the Fed will introduce a minor 25 basis point rate reduction in November. 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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