11 MAR 2024

The Trade Academy Team

08:00 CET - 3 min read

Monday Morning Coffee - Markets Update - 11 Mar 2024 - APAC Equities Falter as Global Markets Eye U.S. Inflation Data for Rate Cut Clues

Markets Update: As global markets brace for these events, investors, policymakers, and analysts alike will be closely monitoring the outcomes for potential implications on economic trajectories and financial landscapes. Stay tuned for in-depth coverage and analysis as the week unfolds.

ECONOMIC CALENDAR

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Global Markets Roundup: 11 MAR 2024

Global financial markets faced turbulence on Monday as Asian shares struggled for momentum, and the dollar exhibited vulnerability in anticipation of the upcoming U.S. inflation report. The outcome of this report is poised to influence the timing of potential global rate cuts. The yen experienced a slight uptick, coinciding with reports from Reuters indicating a growing sentiment among Bank of Japan policymakers favoring the cessation of negative rates this month. This shift is attributed to expectations of substantial pay hikes in the ongoing annual wage negotiations. Contrary to earlier concerns, data released on Monday revealed that Japan is not in recession, as economic growth was revised upward to an annualized 0.4% for the December quarter.

Equities experienced a minor setback, with MSCI's broadest index of Asia-Pacific shares outside Japan easing 0.1% after reaching an eight-month peak on Friday. Japan's Nikkei 225 retreated 2.3%, while Chinese blue chips added 0.2%, lacking strong conviction. In the U.S., S&P 500 futures and Nasdaq futures showed marginal declines, affected by profit-taking on Friday, particularly in the wake of a 5.6% decline in Nvidia shares. European markets, represented by EURO STOXX 50 futures and FTSE futures, fell by 0.4% and 0.2%, respectively.

Over the weekend, Chinese price data indicated a welcome bounce in inflation to 0.7% in February, although producer prices remained in deflation. Beijing pledged to enhance home sales in a "forceful" and "orderly" manner to support the residential property market, albeit without providing detailed plans.

NatWest Markets' Paul Robson predicts tactical strength in the yen in the lead-up to the March 18/19th Bank of Japan meeting. He noted a tactical bearish stance on the USD, initiating short positions against both EUR and JPY. The dollar traded at 146.82 yen, reflecting a 2% loss last week to a five-week low of 146.48. The euro remained steady at $1.0939, following a 0.9% increase last week to $1.0980. The Dollar Index (DXY) experienced a decline of -0.09%, reaching a 7-week low. Simultaneously, the EURUSD pair exhibited a similar decline of -0.09%. The Euro retraced from its 7-week peak, registering marginal losses. This downturn was attributed to dovish statements made by ECB Governing Council members, Nagel and Villeroy de Galhau, who hinted at the possibility of the ECB initiating interest rate cuts in the upcoming spring. Furthermore, USDJPY saw a notable decrease of -0.66% on the same day. The Japanese Yen, conversely, ascended to a 5-week high against the US Dollar following a Reuters report indicating that BOJ policymakers are inclined towards discontinuing negative interest rates during this month's policy meeting. This report contributed to the strengthening of the Yen and added to the downward pressure on the USDJPY pair.

Treasury bonds sustained their rally after the benign jobs report, with 10-year yields touching a one-month low of 4.038% and subsequently trading at 4.060%. The dollar's decline, particularly against the yen, is attributed to market speculation surrounding the potential end of the Bank of Japan's negative rate policy and yield curve control this month.

The decline in the dollar and bond yields supported non-yielding Gold, which rose to $2,180 an ounce, marking a 4.5% surge last week to record peaks. London Metal Exchange (LME) copper contract has experienced a marginal uptick, recording a 0.1% increase and settling at $8,578.50 per ton. Oil prices faced challenges due to concerns about China's demand, offsetting supply cuts by the OPEC+ producer group. Brent dipped 54 cents to $81.54 a barrel, while U.S. crude lost 57 cents to $77.44 per barrel.

Looking ahead Economic Events: March 11 - March 13, 2024

As we navigate through the upcoming week, key economic events are set to unfold, offering insights into the financial landscape. Here's a preview of notable events scheduled for Monday, March 11, 2024:

Monday, March 11, 2024:

- Eurogroup Meeting: The Eurogroup convenes, providing a platform for Eurozone finance ministers to discuss economic policies and financial matters affecting the region.

- Norwegian Consumer Price Index (CPI - Feb): The Norwegian CPI for February will be released, offering a crucial gauge of inflation trends in the Norwegian economy.

Looking further into the week, here's a glimpse of noteworthy events scheduled for Tuesday and Wednesday:

Tuesday, March 12, 2024:

- Norges Bank (NBH) Announcement: The Norges Bank is scheduled to make a significant announcement, potentially impacting monetary policy and financial markets.

- EIA Short-Term Energy Outlook (STEO): The U.S. Energy Information Administration releases its Short-Term Energy Outlook, providing projections and analysis of energy market trends.

- OPEC Monthly Oil Market Report (OMR): OPEC presents its Monthly Oil Market Report, offering insights into global oil market dynamics.

- UK Labour Market Report (Jan/Feb): The United Kingdom releases its Labour Market Report for January and February, shedding light on employment trends and economic conditions.

- U.S. Consumer Price Index (CPI - Feb): The United States unveils its Consumer Price Index for February, a key indicator of inflationary pressures in the nation.

Wednesday, March 13, 2024:

- UK Gross Domestic Product (GDP - Jan): The United Kingdom's Gross Domestic Product for January will be disclosed, providing a comprehensive overview of the country's economic performance.

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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