Global Markets Roundup: 03 May 2024

Asian stocks surged on Friday, reaching their highest level in 15 months, as technology and Hong Kong shares led the rally. This capped a volatile week marked by suspected intervention from Japanese authorities to support the weakening yen.

Regional Markets End Strong

With markets closed in Japan and mainland China, trading activity was subdued. However, the MSCI broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) surged 1% to 547.72, reaching its highest point since February 2023. This strong performance comes after a string of gains, with Hong Kong's Hang Seng Index HSI on track for its ninth consecutive winning day – the longest streak since January 2018.

European Markets Poised for Gains

European markets are also expected to open higher, with Eurostoxx 50 futures FESX1!, German DAX futures DAX1!, and FTSE futures Z1! all indicating positive sentiment.

Yen Stages Rebound

The spotlight this week has been on the USDJPY, which strengthened against the dollar for the fifth consecutive day. It closed at 152.99 per dollar, a significant gain from its 34-year low of 160.245 touched earlier this week. The dollar index DXY was last at 105.24. The EURUSD rose 0.08% to $1.0733, and was eyeing a weekly gain of nearly 0.4%. The GBPUSD climbed 0.12% to $1.2551. The AUDUSD was 0.14% higher at $0.6575.

The NZDUSD edged 0.13% higher to $0.59695.

Yen's Long-Term Decline

Despite the recent rebound, the yen has weakened significantly over the past decade. This is largely due to low Japanese interest rates, which have driven investment away from Japan and towards higher-yielding assets in other economies, particularly the United States. While the yen has seen a notable gain this week, it remains down 8% against the dollar year-to-date.

Intervention Suspected

Market participants suspect Japanese authorities intervened on at least two occasions this week to defend the yen. Data from the Bank of Japan (BOJ) suggests officials may have spent roughly $60 billion to support the currency, keeping global trading desks on high alert for further action from Tokyo.

Upcoming Holidays Create Opportunity

A series of public holidays in Japan and the upcoming bank holiday in the UK, a major forex trading hub, could present another window for intervention by Japanese authorities.

Fed Expected to Hold Rates Steady

The Federal Reserve left interest rates unchanged this week and signaled a potential future rate cut. However, Chair Jerome Powell acknowledged recent strong inflation readings, suggesting the first rate cut may be delayed.

Apple Results Boost U.S. Futures

After-market results from Apple exceeded expectations, with the company announcing a record share buyback program. This news sent its stock price up almost 7% in extended trading. Consequently, U.S. stock index futures are also pointing towards a positive open.

Oil Prices Inch Up, Gold Dips

Oil prices saw a modest increase, with both U.S. crude CL1! and Brent crude BRN1!edging slightly higher. However, GOLD prices dipped slightly and are on track for their second consecutive weekly decline.

Base Metals

Three-month copper on the LME HG1! was trading 0.5% higher to $9,810 per metric ton, aluminium (CMAl3) rose 0.2% at $2,534, and nickel NICKEL1! edged 0.9% up to $18,815. LME zinc ZNC1! climbed 0.5% to $2,899 a ton, lead LEAD1! was higher 0.4% at $2,189 and tin FTIN1! edged 0.4% up to $31,080.

Soft Commodities

The soybean contract on the CBOT ZS1! edged 0.5% to $12.04-1/2 a bushel, while corn ZC1! was 0.7% up to $4.62-3/4 a bushel and wheat ZW1! climbed 1.2% to $6.11-1/4 a bushel. New York cocoa CC2! fell 8.7%, to $7,563 a ton. Prices for the cocoa in London C2! were down 9.6% to 6,555 pounds per ton. Arabica coffee futures KC2! traded 4.6% down to $2.061 per lb, while robusta coffee prices RC2!, lost 7.5% to $3,680 a ton. Raw sugar SB1! edged 0.2% up to 19.25 cents per lb, while refined sugar was 0.4% higher at $570.50 a ton.

Looking forward today, U.S. Jobs Data in Focus

The key economic data point for the U.S. today will be the nonfarm payrolls report. Economists predict the addition of 243,000 jobs, with estimates ranging from 150,000 to 280,000. Additionally, later in the afternoon markets anticipate US ISM Services PMI data.

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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