Global Markets Roundup: 10 May 2024

On Friday, stocks in the Asia-Pacific region surged, poised for a third consecutive week of gains, while the dollar faced pressure as fresh indications of a softening U.S. labor market fueled optimism for potential interest rate cuts later this year, ahead of next week's pivotal inflation data release.

MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) climbed 0.66%, set to notch nearly a 1% increase for the week, marking its third consecutive week of gains. Meanwhile, Japan's Nikkei NI225 surged by 1.6%. In China, stocks also experienced gains, with blue-chip shares rising by 0.14%, while Hong Kong's Hang Seng Index HSI jumped by 1.4%, reaching an eight-month high during early trading. Thursday's data revealed that U.S. initial claims for state unemployment benefits rose more than anticipated by 22,000 to a seasonally adjusted 231,000 for the week ending May 4, according to the Labor Department. This follows last week's report indicating a slower-than-expected job growth in April and a decrease in annual wage increases to below 4.0% for the first time in nearly three years.

Market observers await next week's release of April U.S. producer price index (PPI) and consumer price index (CPI) data for indications of whether inflation is resuming its downward trajectory towards the Fed's 2% target rate. Last month's reports of higher-than-expected inflation tempered expectations of imminent interest rate cuts, with markets now fully pricing in a 25-basis-point rate cut only in November, although there remains a possibility of a cut in September. Traders currently anticipate a total of 47 basis points in cuts from the Fed this year, significantly lower than the 150 basis points anticipated at the beginning of 2024.

BOE Governor Andrew Bailey suggested that there could be more rate reductions than investors anticipate, highlighting the growing divergence between Europe and the U.S. rate outlook. Markets now indicate a 50-50 chance of a BoE cut in June and are nearly fully priced for August. They also imply an 88% chance of easing by the European Central Bank in June.

According to data from the Bank of Japan, Tokyo spent nearly $60 billion last week in suspected interventions to prevent the yen from reaching its 34-year lows of 106.245 per dollar. However, with the yen inching back up to the 155 levels, traders are once again on alert for intervention.

In currencies, USDJPY remains under scrutiny following suspected interventions from Japanese authorities last week. It was last seen at 155.51 per dollar, with Japan's Finance Minister Shunichi Suzuki reiterating Tokyo's readiness to take action against disorderly currency movements. The EURUSD was trading higher at $1.0778.. The GBPUSD traded around $1.2515 level. The dollar index DXY, was trading flat around 105.24.

In commodity markets, oil prices saw an increase, with U.S. crude CL1! rising by 0.63% to $79.76 per barrel and Brent BRN1! reaching $84.33, up by 0.54% on the day. Spot GOLD added 0.3% to $2,352.92 per ounce. Three-month copper on LME HG1! was 0.8% higher to $9,987 per metric ton. LME aluminium ALI1! traded 0.3% higher to $2,570 a ton, nickel NICKEL1! rose 0.2% at $19,065, zinc ZNC1! edged 0.5% to $2,924, while lead LEAD1! lost 0.4% to $2,225.50 and tin FTIN1! was 0.4% lower to $32,460.

In soft commodities, July arabica coffee KC2! was trading 2% higher at $2.0145 per lb. July robusta coffee RC2! edged 0.7% up to $3,439 a metric ton. July London cocoa C2! was 0.5% up to 7,511 pounds per ton. July New York cocoa CC2! settled 0.7% higher at $8,695 a ton. July raw sugar SB1! was trading around 19.58 cents per lb. August white sugar SF1! climbed 0.5% to $575.60 a ton. The CBOT soybean ZS1! contract fell 0.02% to $12.08-2/8 a bushel. Corn ZC1! climbed 0.16% to $4.57-4/8 a bushel, while wheat ZW1! traded 0.31% higher to $6.39-4/8 a bushel.

Looking forward today markets anticipate, UK GDP, Canada Unemployment Rate, US Michigan Consumer Sentiment Prel.

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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