27 MAY 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - 27 May 2024 - Asia Shares Edge Higher as US, EU Inflation Data Anticipated

Markets Update: Despite a busy week ahead culminating in a critical US inflation report that could pave the way for a potential interest rate cut but likely not immediately, APAC shares saw modest gains on Monday as trading volumes were thin due to holidays and investors awaited the outcome of the Federal Reserve meeting in June.

ECONOMIC CALENDAR

by TradingView

You can view all markets data and charts here.

Global Markets Roundup: 27 MAY 2024

APAC shares saw modest gains on Monday as investors geared up for a busy week culminating in a critical U.S. inflation report. This report could pave the way for a potential interest rate cut, although not immediately. Trading volumes were thin due to holidays in the United States and the UK. Anticipation centers on Friday's core personal consumption expenditures (PCE) report, the Federal Reserve's favored inflation gauge. Median forecasts predict a 0.3% increase in April, maintaining an annual rate of 2.8%, with risks tilted to the downside.

Eurozone inflation figures are also due on Friday, with expectations of a slight increase to 2.5%. This is not expected to deter the European Central Bank (ECB) from easing policy next week. Over the weekend, ECB policymakers Piero Cipollone and Fabio Panetta signaled a forthcoming rate cut, with markets indicating an 88% chance of a reduction to 3.75% on June 6. The Bank of Canada may also ease rates next week, while the Federal Reserve is projected to delay its first move until September. At least eight Fed officials are scheduled to speak this week, including two appearances by New York Fed President John Williams.

On Monday, the Bank of Japan (BOJ) indicated a cautious approach to its inflation-targeting framework, acknowledging unique challenges following years of ultra-easy monetary policy. The BOJ's policy meeting on June 14 may see a modest rate hike to 0.15%. The prospect of lower borrowing costs globally has been positive for equities and commodities, though many markets experienced profit-taking last week.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4%, recovering from a 1.5% drop last week and distancing from a two-year peak. Taiwan's TAIEX reached a record high, up over 7% this month on tech sector optimism. Japan's Nikkei NI225 rose 0.3%, ahead of a Tokyo consumer prices report later in the week. Chinese blue chips firmed 0.2%, with key manufacturing and services surveys for May due on Friday. EUROSTOXX 50 futures FESX1! eased 0.1%, while FTSE futures were closed. S&P 500 futures and Nasdaq futures both dipped 0.1%. The Nasdaq reached record highs last week after Nvidia's earnings exceeded expectations. Nvidia has contributed to a quarter of the S&P 500's ES1! gains this year, with the top seven tech companies up 24% for the year.

In currency markets, focus remained on the yen and potential Japanese intervention near the 160.00 level. The USDJPY traded around 156.78 Japan emphasized efforts to counter excessive yen depreciation during a G7 finance leaders' meeting, following a rise in bond yields to a 12-year high. The EURUSD remained steady at $1.0845. GBPUSD pivoted around $1.2735. The AUDUSD traded around $0.6630. The NZDUSD was trading 0.1% higher at $0.6129.

In commodities, oil prices remained near four-month lows amid demand concerns as the U.S. driving season begins. Investors await the outcome of an OPEC+ meeting on June 2, though analysts doubt a consensus on production cuts. Brent crude BRN1! rose 18 cents to $82.30 per barrel, while U.S. crude CL1! increased 23 cents to $77.95 per barrel. GOLD held at $2,340 an ounce, having dropped 3.4% last week, below its all-time peak of $2,449.89.

Looking ahead today, we have uneventful calendar, with only German Ifo Business Climate data, while UK Markets are closed for Spring Bank Holiday, and US Markets closed for Memorial Day.

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