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15 Mar 2024

The Trade Academy Team

08:00 CET - 3 min read

Friday Morning Coffee - Markets Update - 15 Mar 2024 - Tech Slump Drags APAC Down, Dollar Rises on Inflation Woes

Markets Update: APAC stocks fell on Friday, mirroring a tech-driven Wall Street slump triggered by higher-than-expected US inflation data that dampened hopes of Federal Reserve rate cuts.


by TradingView

Global Markets Roundup: 15 Mar 2024

On Friday, APAC stocks faced a downward trajectory, mirroring the tech-driven downturn witnessed on Wall Street. This slump came in the wake of higher-than-anticipated U.S. inflation figures, which tempered expectations regarding the Federal Reserve's potential interest rate cuts. U.S. benchmark bond yields hovered close to the 4.3% mark, a level not seen this month, following a significant leap, marking the largest increase in three months. Concurrently, the dollar surged to its peak since March 5 against a basket of major currencies.

The unexpected surge in producer prices in the U.S. exacerbated concerns about consumer inflation, prompting futures markets to slash the likelihood of a June policy easing to 60%. Additionally, market sentiment for 2024 suggests a diminished expectation of interest rate cuts, down from three to four just two weeks ago. The most pronounced reaction was observed in the U.S. Treasury bond market, where a spike in yields propelled the dollar upwards. The 10-year Treasury yield held steady around 4.28% on Friday, retaining the bulk of its more than 10 basis point surge from the previous session.

U.S. stock futures pointed marginally lower, following a 0.29% dip in the S&P 500 on Thursday. However, the significant sell-off in chip-sector shares reverberated across Asian markets, weighing on regional stock indexes. Hong Kong's Hang Seng tumbled over 1%, as did South Korea's Kospi. Mainland Chinese blue chips, however, remained relatively stable despite the central bank's decision to maintain the medium-term lending facility rate unchanged. Japan's Nikkei eased by 0.3%. Indications persist for a departure from ultra-easy stimulus measures at the Bank of Japan's upcoming two-day policy meeting. In the pre-market in Europe the markets indicate a negative open, with the EURO STOXX 50 Futures trading at 4,990.00 (-0.08%).

The (DYX) dollar index, measuring the currency against a basket of counterparts, climbed 0.07% to 103.45, following a notable 0.58% surge on Thursday, marking its most significant single-day gain in over a month. The yen witnessed a fleeting bout of strength, albeit quickly eclipsed by the resurgent dollar, which surged by 0.11% to settle at 148.48 yen in the USDJPY pairing. This advance marks a continuation of its rebound trajectory since plummeting to 146.48 just seven days prior. Meanwhile, the euro, EURUSD, sustained its downtrend from Thursday, reaching a nadir of $1.08765, marking its lowest point in a week. This decline stands in stark contrast to the preceding Friday's peak of $1.0980, which represented a two-month high for the currency. The GBPUSD, saw a slight dip of 0.10%, reaching $1.2738. Among other currencies, the AUDUSD, depreciated by 0.18%, marking a value of $0.657. Additionally, NZDUSD, exhibited a decline of 0.39%, closing the trading session at $0.611.

In commodities, profit-taking activities drove oil prices lower on Friday, following robust gains fueled by declines in U.S. crude and fuel inventories, drone strikes on Russian refineries, and an uptick in energy demand forecasts. Brent crude oil futures for May slipped by 0.5% to $85.01 a barrel, while U.S. West Texas Intermediate (WTI) crude for April fell by 0.4% to $80.94. The Spot gold exhibited a marginal increase of 0.1%, reaching $2,163.92 per ounce as of 0338 GMT. However, it is noteworthy that the precious metal is poised to register a weekly decline exceeding 0.6%. Shanghai copper prices surged to nearly a three-year peak, paralleled by London prices reaching a 10-month high. This remarkable uptick in value was fueled by speculation surrounding a forthcoming reduction in production from China, the world's leading copper producer. According to data from the London Metal Exchange (LME), three-month copper futures (HG1) exhibited a notable 1.3% increase, climbing to $9,005 per metric ton as of 0539 GMT. Earlier in the session, prices peaked at $9,020, marking the loftiest point since April 2023.

In soft commodities, arabica coffee futures (KCK24) demonstrated resilience by closing with a gain of +1.20 (+0.66%), while ICE robusta coffee (RMK24) also exhibited a modest increase, closing at +17 (+0.52%). The trading session witnessed a nuanced trajectory for arabica coffee prices, initially dipping to a new two-week low before staging a notable recovery. ICE cocoa futures experienced a notable surge, climbing by over 4%. This upturn underscores the persistent challenge posed by a scarcity of cocoa beans, prompting processing plants in leading cocoa-producing nations such as Ivory Coast and Ghana to either curtail or cease operations. Chicago wheat futures displayed minimal movement, maintaining relative stability amidst a market trajectory marked by a third consecutive weekly decline. This downturn was primarily influenced by the notable trend of Chinese buyers opting to cancel shipments, a decision propelled by the abundant availability of wheat across global markets.

Looking ahead, the economic calendar today includes Italy Retail Sales and Balance of Trade, US Export and Import Prices, Industrial Production, and 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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