22 July 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - 22 July 2024 - Market ​Turmoil: China's Rate Cut and Biden's Withdrawal Shakes Asian Markets

Markets Update: Chinese Key Short-Term Rate Trimmed, Yuan Weakens. U.S. Inflation Data Expected to Support September Rate ​Cut. Wall Street Futures Rise Amid Biden’s Withdrawal.

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Global Markets Roundup: 22 July 2024

Asian stocks slid further on Monday, showing minimal response to an ​unexpected rate cut by China’s central bank, while Wall Street futures rose ​following President Joe Biden’s decision to exit the election race. The ​People's Bank of China reduced short-term rates by 10 basis points, leading ​to a drop in long-term borrowing costs and bond yields. This move followed ​Beijing’s release of a policy document on Sunday detailing its economic ​ambitions. Investors appeared unimpressed, seeing the rate cut as an ​indication of economic fragility. Chinese blue chips 3399300 declined 0.9%, ​accompanied by a slip in the yuan.

MSCI's broadest index of Asia-Pacific shares outside Japan ​(.MIAPJ0000PUS) dropped another 0.7%, extending last week's 3% decline. ​Japan's Nikkei NI225 fell by 1.2%, while South Korea's KOSPI dropped ​1.3%. Taiwan’s TWSE:TAIEX faced another tough session, losing 2.3% amid ​worries over U.S. restrictions on chip sales. Markets reacted calmly, with S&P ​500 stock futures ES1! rising 0.1% and Nasdaq futures NQ1! gaining 0.2%. ​Futures for 10-year Treasuries (TYc1) increased by 2 ticks, while 10-year ​bond yields US10Y dipped by 2 basis points to 4.22%. EUROSTOXX 50 ​futures FESX1! went up 0.5%, and FTSE futures Z1! climbed 0.4%. Investors ​were more prepared for the news of President Biden stepping down and ​endorsing Vice President Kamala Harris for the Democratic ticket.

In currency markets, The USDJPY was 0.03% lower to 157.435, while the ​euro EURUSD climbed 0.07% to $1.0891 and sterling GBPUSD edged 0.08% ​higher to $1.2921.

In commodities and soft commodities, GOLD held steady at $2,406 an ​ounce, short of last week's record high of $2,483.60. Oil prices rose slightly, ​with little progress on a ceasefire deal in Gaza as Israeli forces continued to ​clash with Palestinian fighters in Rafah. Brent BRN1! gained 44 cents to ​$83.07 a barrel, while U.S. crude CL1! increased by 41 cents to $80.54 per ​barrel. Wheat on the CBOT ZW1! traded 1.2% higher at $5.49 a bushel, ​while corn ZC1! climbed 1.1% to $4.09-1/4 a bushel.

Europe’s largest banks will report this week, with attention on whether gains ​from higher interest rates are diminishing and if recent political ​developments are affecting sentiment. The week will conclude with the ​Federal Reserve's favored inflation measure, the core personal consumption ​expenditures index, expected to show a 0.1% rise in June, bringing the ​annual rate down to 2.5%. Additionally, advance GDP figures are anticipated ​to show growth accelerating to an annualized 1.9% in Q2, from 1.4% in Q1. ​The closely watched Atlanta Fed GDPNow indicator predicts 2.7% growth, ​suggesting an upside risk. The Bank of Canada is meeting on Wednesday, ​and is widely expected to cut rates by a quarter point to 4.5%.

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General news - Information source from multiple newswires.

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

The Trade Academy Team