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Markets Update: Global markets reacted positively to the Federal Reserve's decision to maintain interest rates, with Asian stocks and U.S. futures rising while the yen experienced volatility and oil prices declined due to demand concerns.
Economic Calendar
Global Markets Roundup: 02 May 2024
Stocks in the Asia-Pacific region and U.S. futures experienced gains on Thursday following remarks from the Federal Reserve that mitigated concerns regarding an imminent interest rate hike. Meanwhile, the Japanese yen exhibited volatility following suspected intervention efforts by Japan's authorities. Following Federal Reserve Chair Jerome Powell's statements suggesting the possibility of maintaining elevated interest rates, the yen swiftly strengthened against the dollar. This marked the second abrupt surge in the Japanese currency this week, with market speculation leaning towards government intervention to bolster the yen's value. The yen briefly reached a high of 153 against the dollar (USDJPY) before retracting to approximately 156 in Asian trading.
European futures displayed mixed trends, with EUROSTOXX 50 futures down 0.2%, while FTSE futures advanced by 0.4%. Conversely, S&P 500 futures rose by 0.5%, indicating a potential recovery from a late downturn on Wall Street. MSCI's broadest index of Asia-Pacific shares outside Japan recorded a 0.7% increase, primarily driven by a 2% surge in Hong Kong. The Nikkei 225 index in Tokyo remained relatively unchanged amidst the market fluctuations.
Despite the Federal Reserve's decision to maintain interest rates and Powell's acknowledgment of high inflation levels with uncertain progress towards mitigation, speculation regarding a potential rate hike was not entertained. Powell emphasized the significance of data in determining future monetary policy actions, leading traders to interpret a rate cut as more likely than a hike. Treasuries experienced a rally, resulting in lower yields, following the Fed's announcement of slowing its balance-sheet runoff. However, a partial reversal of this trend occurred in Asian trading. Ten-year Treasury yields rose by 2.3 basis points to 4.614% in Tokyo, after a 9.3 basis point decline in New York. Similarly, two-year yields, which had dropped over 10 bps in New York, rose by 1 bp to 4.9497%.
Regarding earnings, chipmaker Qualcomm surpassed market expectations for sales and profit, leading to a 4% increase in its shares during after-hours trading. Market attention later in the day will be on Apple's results, with expectations of a significant sales decline and interest in the company's plans for integrating AI into iPhones.
In the foreign exchange market, attention was focused on the yen's movements, particularly after its surge in late New York trading. Despite some retracement during the Asian session, the yen remained under scrutiny. The dollar strengthened by approximately 0.8% to 155.80 yen, while the euro and Australian dollar also demonstrated gains against the yen. The dollar index DXY, was flat at 105.70. The EURUSD was trading around $1.07175. The GBPUSD rose 0.06% to $1.25345.
Oil prices experienced a notable decline due to concerns over demand and an unexpected rise in U.S. stockpiles. Brent crude futures witnessed a marginal increase of 54 cents per barrel, reaching $83.98, subsequent to touching a seven-week low of $83.29 on Thursday. Meanwhile, U.S. crude CL1! stood at $79.52 per barrel. Outside of the oil market, trading in other commodities remained subdued due to ongoing holidays in China, where markets are closed for the remainder of the week. Gold prices rose overnight, stabilizing at $2,314.44 during Asian trading.
In agricultural commodities, the wheat contract on the CBOT ZW1! was higher 0.2% at $6.00-1/2 a bushel. CBOT soybeans ZS1! was 0.5% up at $11.76-1/4, and corn ZC1! rose 0.3% to $4.52 a bushel. July New York cocoa CC2! fell 10.8% to $8,284 a ton. July London cocoa C2! slipped 8.6% to 7,250 pounds per ton. July robusta coffee RC2! traded 1.1% down to $3,978 a ton. July arabica coffee KC2! was 0.3% down to $2.16 per lb. July raw sugar SB1! fell 1% at 19.22 cents per lb. August white sugar SF1! fell 0.5% to $566.30 a ton.
Looking forward today, markets anticipate, EU HCOB Manufacturing PMI, US Balance of Trade, Canada Balance of Trade, US Initial Jobless Claims, US Factory Orders, Brazil Balance of Trade.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team