20 MAY 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - 20 May 2024 - APAC Shares Reach Two-Year High as China Announces Property Support

Markets Update: Fueled by China's property market support and hopes of global rate cuts, APAC stocks reached a two-year high on Monday as investors awaited a week filled with policy speeches, central bank decisions, and key economic data releases.

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Global Markets Roundup: 20 MAY 2024

APAC shares surged to a two-year high on Monday, propelled by China’s robust measures to tackle its property crisis and anticipated global rate cuts. The dollar stabilized after a week of decline.

Japan’s Nikkei NI225 climbed 0.9% in early trading. Hang Seng futures HSI indicated gains, while MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.25%, reaching a two-year high with early gains in Australia and South Korea. Following record highs in global stocks last week due to easing U.S. inflation, attention this week turns to policy speeches, meeting minutes, a central bank decision in New Zealand, and Nvidia's results, amid a lull in the data calendar.

Late last week, global bonds reversed a rally following encouraging U.S. CPI data, influenced by policymakers' comments. U.S. Federal Reserve Governor Michelle Bowman reiterated her readiness to hike rates if inflation progress stalls or reverses. European Central Bank board member Isabel Schnabel suggested a June rate cut might be appropriate but dampened expectations for subsequent cuts. Two-year U.S. Treasury yields (US2YT=RR) ended last week four basis points lower at 4.825% and remained steady in Asia. Ten-year U.S. yields (US10Y) fell 8.4 bps last week to 4.42%. Two-year bund yields (DE2YT=RR) rose 2 bps to 2.988%.

On Friday, China introduced significant measures to stabilize its property sector, with the central bank providing 1 trillion yuan ($138 billion) in additional funding and easing mortgage rules. Local governments will also purchase some apartments, aiding the Hang Seng HSI to a nine-month high and driving growth-sensitive copper prices to a 26-month peak. Three-month nickel surged to its strongest in nine months due to unrest in nickel-exporting New Caledonia.

In currency markets, the dollar recorded its largest weekly drop against the euro in two-and-a-half months last week but held steady in Asia on Monday. The EURUSD was stable at $1.0873, while the USDJPY was slightly softer at 155.82. The Australian dollar AUDUSD rose 1.4% last week and held at $0.6698, with the NZDUSD steady at $0.6135.

In commodities, Brent crude futures BRN1! hit a one-week peak at $84.14 per barrel, partly influenced by a helicopter crash in heavy fog involving Iran’s president, which shifted traders’ focus to the Middle East. U.S. WTI crude for June CL1! lost 5 cents to $80.01 a barrel. GOLD hovered near a record high at $2,423 per ounce. Three-month copper on the LME HG1! edged 2.7% up to $10,959.50 per metric ton. LME aluminium ALI1! jumped 0.4% to $2,623.50 a ton, zinc ZNC1! rose 0.9% up to $3,057.50, lead LEAD1! climbed 0.8% to $2,301.50, tin FTIN1! was trading 0.4% up at $34,375 and nickel NICKEL1! was traded 0.1% up at $21,100.

In agricultural commodities, The most-active wheat contract on the CBOT ZW1! climbed 1.2% to 6.59-1/4 a bushel. Soybeans ZS1! lost 0.2% to $12.25-3/4 a bushel and corn ZC1! jumped 0.3% to $4.54 a bushel.

Looking ahead this week, markets anticipate:

• Tuesday: Australia Westpac Consumer Confidence, RBA Meeting Minutes, German PPI, Canada Inflation Rate;
  
• Wednesday: UK Inflation Rate, FOMC Minutes;
  
• Thursday: US Initial Jobless Claims, US New Home Sales;
  
• Friday: Japan Inflation Rate, UK Retail Sales, US Durable Goods Orders, Canada Retail Sales.
  

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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