22 APR 2024

The Trade Academy Team

07:30 CET - 3 min read

Monday Morning Coffee - Markets Update - 22 Apr 2024 - APAC Stocks Rebound as Mideast Tensions Ease; Oil and Gold Retreat

Markets Update: Asia-Pacific stocks rebounded as Mideast tensions eased, with bond yields rising, the dollar weakening slightly, and oil prices dipping as focus shifted back to fundamentals.

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Global Markets Roundup: 22 APR 2024

Stock markets across the Asia-Pacific region saw a resurgence on Monday, buoyed by diminished concerns over escalating tensions in the Middle East. As fears of a broader conflict subsided, investors turned back to riskier assets, driving up stock prices and bond yields. The retreat in gold and the safe-haven dollar, along with a decline in crude oil prices, reflected a shift in sentiment away from geopolitical uncertainty. The de-escalation was prompted by Iran's announcement on Friday that it had no immediate plans for retaliation following an Israeli drone attack within its borders. This development followed an unprecedented missile and drone strike by Iran on Israel just days earlier.

MSCI's broadest index of Asia-Pacific shares rebounded by 0.93%, partially recovering from a 1.8% drop on Friday triggered by news of the Israeli strike. Japan's Nikkei index rose by 0.48%, albeit underperforming other regional indices due to a concentration of chip-sector shares, which mirrored declines in U.S. peers from the previous trading session. Australia's XJO and South Korea's KOSPI both posted gains of 0.96% and 1.04% respectively. Hong Kong's Hang Seng surged by 2.26%, while mainland Chinese blue chips edged up by 0.12%, reacting positively to new measures announced on Friday aimed at promoting overseas investment in China's technology sector. Mideast tensions remained on the market's radar, with reports of at least five rockets launched from Iraq towards a U.S. military base in northeastern Syria on Sunday. Last week, MSCI's world equities index suffered its most significant decline since March 2023, dropping by 2.85%. Early Monday trading saw a marginal increase of just 0.06%. U.S. stock futures rose by 0.26%, following a 0.88% decline for the S&P 500 on Friday. In European pre-market the EURO STOXX 50 Index Futures FESX1! trades slightly positive.

Bond yields, which move inversely to prices, climbed towards multi-month highs. The 10-year U.S. Treasury yield added as much as 9 basis points to 4.658%, nearing the five-month peak of 4.696% reached the previous week, driven by expectations that the Fed would maintain its current policy stance amid robust economic data and persistent inflationary pressures.

In currenices, the dollar index DXY eased slightly by 0.07% to 106.03, having reached a five-month high of 106.51 last week. The yen USDJPY hit 154.70 per dollar, not far from last week's 34-year low of 154.79. The AUDUSD bounced 0.3% to $0.6440 and the NZDUSD gained 0.4% to $0.5915.

In commodities, crude oil prices declined as market focus shifted back to fundamentals. Brent futures fell by 0.6% to $86.75 a barrel, while the May U.S. West Texas Intermediate (WTI) crude contract dropped to $83.02 a barrel ahead of its expiration on Monday. GOLD prices slid by 0.6% to $2,376.40, retreating from near the all-time peak of $2,431.29 reached the previous week. LME copper HG1! rose 0.4% to $9,916.50, but aluminium ALI1! fell 0.3% to $2,662, zinc ZNC1! traded down 0.4% to $2,840, lead LEAD1! lost 1.4% to $2,188.50.

In soft commodities, the most-active wheat contract on the CBOT ZW1! was up 0.1% at $5.67-1/4 a bushel. Corn ZC1! fell 0.3% to $4.32-1/4 a bushel, while soybeans ZS1! fell 0.4% down, to $11.61 a bushel.

Looking ahead, EUR Government Budget to GDP, UK CBI Business Optimism Index, CBI Industrial Trends Orders, PBoC LPR, US National Activity Index (Mar), South Korean PPI Growth (Mar), EU Consumer Confidence Flash.

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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