Global Markets Roundup: 28 June 2024

Asian stocks were set to achieve a fifth consecutive month of gains on Friday, ​driven by expectations that cooling U.S. inflation could lead the Federal ​Reserve to lower interest rates this year. Meanwhile, the yen plummeted to a ​38-year low against the dollar. Friday's market activity is filled with risk ​events following a relatively calm week. The focus is on the release of May's ​U.S. core personal consumption expenditures (PCE) price index, the Federal ​Reserve's preferred inflation measure.

Asian markets remained largely unaffected by the first U.S. presidential ​debate between Democratic President Joe Biden and his Republican rival ​Donald Trump ahead of the November election. However, U.S. stock futures ​and the dollar rose as investors began to favor a Trump victory.

S&P 500 futures ES1! and Nasdaq futures (NQ1!) increased by 0.2% and ​0.32%, respectively. EUROSTOXX 50 futures FESX1! gained 0.22%, while ​FTSE futures (Z1!) advanced 0.24%. MSCI's broadest index of Asia-Pacific ​shares outside Japan (.MIAPJ0000PUS) rose 0.35%, aiming for a monthly ​gain of over 3%, its best performance since February. Anticipation of Fed ​policy easing and momentum from the artificial intelligence boom have ​driven a risk rally across stock markets, propelling Wall Street to record ​highs and lifting Asian shares. Chinese markets reversed early losses, with ​the benchmark CSI300 up 0.72% and Hong Kong's Hang Seng Index HSI ​gaining 0.57%. The yen's weakness has benefited the Nikkei NI225, which ​rose 0.4% and is targeting a monthly gain of 2.6%.

Traders now see a 64% chance of a Fed rate cut in September, up from 50% ​a month ago, according to the CME FedWatch tool. However, these ​expectations could change if Friday's core PCE figures exceed predictions.

In currency markets, the dollar DXY was strong, eyeing a monthly gain of ​1.3% against a basket of currencies. The Australian dollar AUDUSD lost ​0.35% to $0.6624, while the euro EURUSD traded 0.13% lower to $1.0690, ​heading for a monthly decline of approximately 1.4%. The euro's decline is ​attributed to political turmoil in the EU, with France's snap election this ​weekend. The yen USDJPY tumbled to 161.27 per dollar, its weakest since ​1986, before recovering slightly. The Japanese currency has fallen around ​2.25% this month and over 12% this year against a robust dollar, affected by ​significant interest rate differentials between the U.S. and Japan. This has ​bolstered the yen's appeal as a funding currency for carry trades, where ​investors borrow in low-interest currencies and invest in higher-yielding ​assets.

The yen's latest decline has kept investors alert for possible intervention from ​Tokyo. Japanese authorities spent 9.79 trillion yen ($60.94 billion) in late ​April and early May to strengthen the yen USDJPY by 5% from its 34-year ​low of 160.245. Data on Friday showed core consumer prices in Tokyo rose ​2.1% in June from a year earlier, highlighting the Bank of Japan's challenge ​in timing its next interest rate hike. The weak yen is keeping inflation above ​the 2% target but also hurting consumption. Japan's government appointed ​financial regulation expert Atsushi Mimura as its top currency diplomat, ​replacing Masato Kanda, who managed the largest currency intervention on ​record this year to combat sharp yen declines.

In commodities/agricultural commodities, GOLD struggled under a strong ​dollar, falling 0.13% to $2,324.40 an ounce. Brent crude oil BRN1! futures ​rose 0.61% to $86.92 a barrel, while U.S. West Texas Intermediate crude ​CL1! futures gained 0.67% to $82.29 per barrel. Three-month copper on the ​LME HG1! edged 0.5% higher at $9,563 per metric ton. Corn ZC1! climbed ​0.3% to 4.23-3/4 a bushel and soybeans ZS1! jumped 0.4% at $11.09-1/4 a ​bushel. September arabica coffee KC2! closed 0.9% higher, at $2.2635 per ​lb. September London cocoa CC2! ​closed 7.4% lower, to 6,139 pounds per ​ton. August white sugar SF1! edged 2.8% higher at $585.10 a metric ton.

Looking ahead today markets anticipate, German Unemployment ​Change/Rate, Italy Inflation Rate Prel, US Core PCE Price Index, US Personal ​Income/Spending, Canada GDP, Michigan Consumer Sentiment.

You can view all markets data and charts here.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team

Rating: Mixed Outlook

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