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Markets Update: Investors are more optimistic about a US rate cut this month. The dollar gains strength, while the Euro weakens amid political turmoil in France. Chinese stocks hit a 3-week high on stimulus hopes. Bitcoin drops below $100,000. The S&P 500 and Nasdaq climb.
Global Markets Roundup: 6 December 2024
FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!
Investors increased their expectations for a U.S. interest rate reduction this month after payroll data indicated job growth was approximately in line with November forecasts, while the euro declined against the dollar amid political unrest in France. Futures markets assigned an 87% probability to the U.S. Federal Reserve lowering rates by 25 basis points at its December 17-18 meeting following the data, up from 68% earlier in the session. Nonfarm payrolls rose by 227,000 jobs last month after an upwardly revised increase of 36,000 in October, a month affected by hurricanes and strikes. Economists surveyed by Reuters had predicted a payroll increase of 200,000 jobs. Two of Wall Street's three major stock indexes rose following the data. The Dow Jones Industrial Average DJI dropped 0.16%, to 44,696, the S&P 500 SPX climbed 0.20%, to 6,086, and the Nasdaq Composite IXIC gained 0.56%, to 19,811.86.
European stocks also edged up 0.1% on the day SXXP, while Britain's FTSE 100 declined about 0.5% UK100, as investors processed the news that British insurer Aviva AV. had agreed to acquire Direct Line for 3.6 billion pounds ($4.6 billion). In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) recovered from earlier declines to rise by 0.2%, attributed to a surge in Chinese shares. This offset investor wariness regarding political unrest in South Korea. Chinese shares reached three-week highs as investors purchased technology stocks in anticipation of a high-level policy meeting next week, which will establish the agenda and targets for China's economy for the coming year.
Treasury yields declined following the data on Friday. The yield on U.S. 10-year benchmark notes US10Y decreased by 1.4 basis points to 4.168%, down from 4.182% late Thursday. Meanwhile, the 2-year note (US2YT=RR) yield, which generally aligns with interest rate expectations for the Federal Reserve, dropped 4.8 basis points to 4.098%, from 4.146%. The risk premium that investors require to hold French debt instead of German Bunds fell to a two-week low on Friday, following President Emmanuel Macron's announcement that he would soon appoint a new prime minister to secure parliamentary approval for the 2025 budget.
In the foreign exchange markets, the U.S. dollar index increased by 0.2% to $105.93 DXY. The euro had surged on Thursday, as markets were relieved that France had avoided a more unstable political scenario for the time being. The euro remained mostly unchanged for the day and the week at $1.057 EURUSD. Bitcoin BTCUSD, which reached the $100,000 milestone for the first time on Thursday as investors anticipated a favorable U.S. regulatory change, faced profit-taking. It dropped to as low as $92,092 and was last slightly up for the day at $99,272. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD
In commodities, oil prices decreased as OPEC+'s decision to postpone a planned increase in output until April highlighted worries about weak demand. U.S. crude CL1! declined 1.3% to $67.41 per barrel, and Brent BRN1! fell to $71.26, a decrease of 1.15% for the day. Gold prices edged up, rising about 0.3% to $2,639 per ounce GOLD, but were still on track for a second consecutive week of declines.
In agricultural commodities, cocoa prices reached new 5-1/2 month highs on Friday as stocks remain extremely limited, raising concerns about this season's supply prospects. Meanwhile, coffee prices surged. London cocoa futures on ICE C2! increased by 1.1% to 7,938 pounds per metric ton at 1327 GMT, after reaching their highest level since mid-June at 8,075. ICE exchange-held stocks (CC-TOTAL-TOT) have fallen to record lows of just over 1.5 million bags. New York cocoa CC2! rose 0.7% to $9,926 a ton, after reaching its highest since mid-June at $10,092. Arabica coffee futures KC2! climbed 3.7% to $3.2495 per lb, approaching Friday's $3.3545 peak, the highest since 1977. Robusta coffee RC2! rose 3.7% to $5,053 a ton, also hitting its highest since 1977 last Friday. March raw sugar SB1! increased by 0.6% to 21.33 cents per lb, after hitting its lowest point in over two months on Monday. March white sugar SF1! remained largely unchanged at $550.40 a ton. The most active wheat contract on the Chicago Board of Trade (CBOT) ZW1! fell by 0.36% to $5.56-1/4 a bushel. Earlier, it had risen to $5.60-3/4, matching a one-week high from Thursday. CBOT soybeans ZS1! edged up 0.03% to $9.94 a bushel, while corn increased by 0.11% to $4.35-50 a bushel. U.S. corn futures reached a two-week high on Friday due to technical buying and support from robust U.S. export sales, setting the market on track for its strongest weekly gain in a month. Soybeans rose alongside corn, though expectations of a record-breaking Brazilian harvest capped gains, while wheat futures showed mixed results. Row crop futures have mostly remained within narrow trading ranges since mid-November as traders evaluated crop weather in South America, Russia, and other key production areas, and considered potential changes to global trade following the U.S. presidential election. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1! | LEI
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team