29 APR 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - Apr 29 2024 - APAC Stocks Rebound as Mideast Tensions Ease; Oil and Gold Retreat

Markets Update: A volatile market day unfolded after the Bank of Japan maintained its accommodative stance, weakening the yen but boosting Asian stocks and US tech futures, while concerns about US inflation and growth sent the dollar down and Treasury yields up.

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Global Markets Roundup: 29 APR 2024

Asian-Pacific stocks opened the week on a positive note, buoyed by anticipation surrounding the upcoming Federal Reserve policy meeting. Concurrently, the yen saw a significant decline, breaching the crucial threshold of 160 yen against the dollar for the first time in decades. Monday's trading session witnessed a surge in APAC stocks as investors turned their focus to the impending Federal Reserve meeting scheduled later this week. Concurrently, the yen experienced a notable depreciation against the dollar, surpassing the psychologically significant level of 160 yen, a milestone not seen in 34 years.

Despite the persistent weakening of the yen, Japanese officials have refrained from intervening in currency markets, opting instead to issue warnings against excessive yen depreciation. Christopher Wong, a currency strategist at OCBC, observed that markets are actively exploring the upside potential of the dollar/yen currency pair. The Bank of Japan's decision to maintain interest rates at zero during its recent policy meeting, along with its reluctance to significantly reduce bond purchases, contributed to the bearish sentiment towards the yen. Additionally, expectations of the Federal Reserve postponing its rate-cutting cycle further fueled downward pressure on the yen. Broader indices reflected positive sentiment, with MSCI's Asia-Pacific shares outside Japan gaining 0.56%, supported by Wall Street's rally in megacap growth stocks. Similarly, futures for Nasdaq and S&P 500 each rose by 0.2%. In specific markets, Hong Kong's Hang Seng Index surged by 0.77%, while China's blue-chip index edged 0.06% higher. Japan's Nikkei index NI225 was up 0.81%.

Attention now turns to the Federal Reserve's two-day monetary policy meeting commencing Tuesday, where analysts anticipate rates to remain unchanged. However, market focus will center on any indications regarding the central bank's future rate trajectory, amidst recent economic data exceeding expectations and lingering inflationary pressures. Market sentiment suggests a shift in expectations, with projections for the first Fed rate cut now pushed to September, compared to initial predictions of a June commencement.

In currencies, the EURUSD traded 0.21% higher to $1.0715, while GBPUSD rose 0.23% to $1.2522. The dollar index DXY was little changed at 105.98. The USDJPY was highest in 34 years at 160.245.

In the commodities market, Brent crude fell over 1% to $88.55 a barrel, while U.S. crude CL1! similarly declined by 1% to $83.02 per barrel. Both commodities have seen a 15% increase in value year-to-date, partly due to concerns over geopolitical tensions in the Middle East. Meanwhile, gold prices dipped by 0.34% to $2,329.37 an ounce, reflecting a cautious market sentiment amidst ongoing geopolitical uncertainties. The wheat contract on the CBOT ZW1! was trading 0.5% down at $6.19 a bushel. CBOT soybeans ZS1! was 0.2% higher to $11.79-3/4 a bushel, and corn ZC1! rose 0.1% at $4.50-1/4 a bushel.

Looking ahead today, EU Economic Sentiment, German Inflation Rate, Dallas Fed Manufacturing Index.

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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