Global Markets Roundup: 01 Mar 2024

Tokyo, March 1, 2024 – Japan's Nikkei index reached a historic milestone on Friday, propelled by a Wall Street rebound driven by the U.S. inflation data meeting expectations. While Australia's resource-heavy shares also reached a record high, other Asian markets remained subdued due to uncertainties surrounding China's economic outlook.

The Nikkei index (NI225) surged by 1.8%, establishing a new all-time high, building on a 7.9% surge from the previous month, marking levels not seen since 1989. Similarly, Australia's shares (XJO) achieved a record high, closing the day with a 0.3% gain. In contrast, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) experienced a 0.1% dip, weighed down by a 0.2% drop in Hong Kong's Hang Seng index (HSI). The overall Asia index is poised for a weekly loss of 1%. In Europe the Europe Stoxx 50 is expected to open slightly higher.

Data released on Friday indicated that China's factory activity contracted for the fifth consecutive month in February, emphasizing an uneven recovery in the world's second-largest economy. Zhiwei Zhang, Chief Economist at Pinpoint Asset Management, noted the challenges of interpreting the PMI data for February due to the impact of the Chinese New Year holiday and emphasized the need for additional macro data for a clearer economic assessment.

Japan faced its own challenges, with a private-sector survey revealing the fastest contraction in factory activity in over 3.5 years in February. On Wall Street, the S&P 500 and Nasdaq closed at record highs, driven by the U.S. personal consumer expenditures (PCE) price index meeting expectations. The data sustained expectations of a potential interest rate cut in June, with markets pricing in an 82 basis points easing for the year. Taylor Nugent, Senior Economist at National Australia Bank, commented on the PCE data, noting its confirmation of the unhelpful January inflation surprise and expressing concerns about the continuity of the disinflation trend.

Forex

In the wake of the latest inflation report, the dollar index DXY, a metric gauging the U.S. currency against six major counterparts, registered at 104.12 following a volatile overnight session. The report revealed that U.S. prices in January aligned with expectations, yet annual inflation descended to its lowest point in three years. Simultaneously, the euro (EURUSD) exhibited a marginal increase of 0.1%, reaching $1.08155 in anticipation of the forthcoming euro zone inflation report. Forecasts suggest a decline in prices, potentially fortifying the rationale for the European Central Bank to initiate rate easing later this year. The Australian dollar (AUDUSD) experienced a modest uptick of 0.17%, reaching $0.65085, while the New Zealand dollar (NZDUSD) posted a 0.09% gain, reaching $0.60925. Following a brief surge on Thursday, the yen (USDJPY) reverted to the 150 per dollar range it has consistently maintained in recent weeks, prompting concerns about potential intervention by Japanese authorities.

Commodities and Metals

Oil prices edged up, with Brent rising to $82.21 a barrel and U.S. crude reaching $78.47 per barrel. The spot gold price remained steady at $2,043.99. Three-month nickel on the London Metal Exchange NICKEL1! slid 0.5% to $17,785 per metric ton by 0445 GMT. The contract has gained 1.7% so far this week.

May arabica coffee (KCK24) on Thursday closed up +2.60 (+1.43%), and May ICE robusta coffee (RMK24) closed up +51 (+1.68%).

May ICE NY cocoa (CCK24) on Thursday closed up +55 (+0.92%), and Mar ICE London cocoa #7 (CAH24) closed up +120 (+2.20%).

Key Economic Indicators and Corporate Events to Watch on Friday:

Data Releases:

- Euro Zone Purchasing Managers' Index (PMIs)

- Euro Zone Consumer Price Index (CPI)

- Italy Unemployment Rate

- U.S. February Institute for Supply Management (ISM) Manufacturing Index

- UK House Prices

Speaker Insights:

- Federal Reserve (Fed) Atlanta President Raphael Bostic

- Federal Reserve (Fed) Board Governor Adriana Kugler

Corporate Earnings Reports:

- Daimler Truck Holding (DTG)

- Pearson PLC (PSON)

- Aegon Ltd (AGN)

- Rightmove PLC (RMV)

- Vallourec SA (VK)

- Virgin Money UK (VMUK)

Government Debt Auctions:

- United Kingdom: Reopening of 1-month, 3-month, and 6-month debt auctions

- Germany: Reopening of 7-year and 13-year debt auctions

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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