8 July 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - July 8, 2024 - APAC Shares ​Steady; Euro Pressured by French Political Gridlock

Markets Update: Euro dips amid French political uncertainty and potential hung parliament. Investor sentiment buoyed by hopes for ​a U.S. Federal Reserve rate cut in September.

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Global Markets Roundup: 8 July 2024

Asian stocks edged higher on Monday as investor confidence grew regarding ​a potential U.S. rate cut in September. Meanwhile, the euro faced challenges ​due to political uncertainty in France, where recent elections suggest a hung ​parliament.

In a surprising outcome, a leftist alliance in France has taken the lead over ​the far-right National Rally (RN) party, diminishing the possibility of Marine Le ​Pen's party running the government. While this was a relief for investors ​concerned about far-right policies, there are also worries that the left’s plans ​might roll back many of President Emmanuel Macron's pro-market reforms.

Equities gained support from the prospect of U.S. policy easing. MSCI's ​broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) ​increased by 0.1%, reaching a two-year high last week. Japan's Nikkei NI225 ​rose 0.2%, nearing record highs, while Chinese blue chips 3399300 dropped ​0.4%, with bond yields rising as the central bank initiated new money market ​operations. S&P 500 futures ES1! and Nasdaq futures NQ1! both declined by ​0.1%. This week’s earnings reports from Citigroup C, JPMorgan JPM, and ​Wells Fargo WFC are highly anticipated. EUROSTOXX 50 futures FESX1! ​and FTSE futures Z1! both rose 0.1%, while French 10-year bond futures ​(FOATc1) dipped by 23 ticks or 0.21%.

Friday’s jobs report reinforced the likelihood of a September rate cut from ​the Federal Reserve, with futures (0#FF:) indicating a 77% chance of such a ​move . Market expectations now include 53 basis points of easing for the ​year, up from about 40 basis points a month ago. Treasuries rallied following ​the report, with 10-year yields US10Y falling to 4.30%, down from a peak of ​4.4930% early last week.

In currencies, the euro dipped slightly to $1.0828 EURUSD, down from ​$1.0843 on Friday, impacted by a soft U.S. jobs report. It also fell 0.25% ​against the Swiss franc to 0.9680 EURCHF but held steady against the yen at ​174.00 EURJPY. The dollar was at 160.70 yen USDJPY, just below its recent ​high of 161.86.

In commodity and agricultural commodity markets, GOLD remained near ​one-month highs at $2,385 an ounce. Oil prices dipped as the market ​awaited the impact of Hurricane Beryl on Gulf of Mexico supplies, with Brent ​BRN1! down 14 cents to $86.40 a barrel and U.S. crude CL1! falling 29 cents ​to $82.87 per barrel. Three-month copper on the LME HG1! lost 0.2% to ​$9,925.50 per metric ton. The CBOT corn ZC1! lost 0.4% to $4.22-1/4 a ​bushel, and soybeans ZS1! was 0.8% lower to $11.20-3/4 a bushel. The ​most-active wheat contract on the CBOT ZW1! traded 0.7% lower at $5.86-​1/4 a bushel.

Looking ahead this week, markets significant events include U.S. CPI data, ​Fed Chair Powell’s testimony, and major corporate earnings reports. On the ​same day, Germany will release its inflation data, and China will publish ​consumer prices and trade figures.

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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