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Markets Update: Investors are anticipating the specifics of China's stimulus measures and are particularly interested in the briefing on fiscal policy adjustments scheduled for Saturday. The dollar is trading at a two-month peak in anticipation of U.S. inflation data. Traders have tempered their expectations for significant interest rate reductions.
Global Markets Roundup: 10 October 2024
Chinese stocks continued their upward trend on Thursday, driven by expectations of an upcoming briefing by finance officials over the weekend that was anticipated to announce fiscal stimulus measures. Meanwhile, the dollar remained close to a two-month high ahead of a U.S. inflation report. Mainland shares received an early boost during the Asia session as China's central bank initiated its 500 billion yuan plan to support capital markets, which was unveiled late September as part of a series of stimulus initiatives.
The CSI300 index in China rose by approximately 3%, partially recovering from the previous day's 7% decline, which was prompted by investor concerns regarding the lack of specifics in the stimulus package. Hong Kong's Hang Seng index surged by over 4% following a 1.3% drop on Wednesday, bringing its year-to-date gain to 26%. As a result, MSCI's broadest index of Asia-Pacific shares outside Japan rose by 1.25%, with futures pointing to a slightly higher opening for European stock markets. Japan's primary Nikkei index, NI225, ended the day with a 0.26% increase, closing at 39,380.89. FESX1! | Z1! | NI225 | NQ1! | ES1!
Benchmark indexes in China notched their biggest daily losses on Wednesday since the COVID-19 pandemic began. Overall, the CSI300 index is up 26% and the Shanghai Composite index 000001 is up 22% since the measures were first announced on Sept. 24. Overnight, the S&P 500 SPX and the Dow DJI closed at record highs after the release of Federal Reserve meeting minutes and ahead of September inflation data. The minutes showed a "substantial majority" of Fed officials at the September meeting supported beginning an era of easier monetary policy with an outsized half-point rate cut. However, there appeared even broader agreement that the initial move would not commit the Fed to any particular pace of rate reductions in the future, the minutes showed. Markets are pricing in an 82% chance of a 25 basis point cut next month, CME FedWatch tool showed, with investors scaling back expectations for aggressive rate cuts after last week's strong U.S. jobs report. FESX1! | Z1! | NI225 | NQ1! | ES1!
In the foreign exchange markets, the dollar has been strengthened by changing U.S. interest rate expectations, as evidenced by the steady performance of the dollar index (DXY) against six major currencies, which reached its highest level since August 16. The U.S. dollar rose to 149.40 yen (USDJPY) and briefly touched 149.54 yen for the first time since August 2. The euro (EURUSD) remained unchanged at $1.0940 after dropping to $1.0936 in the previous session. The Australian dollar (AUDUSD), which is sensitive to risk, increased by 0.32% to $0.6740, supported by a rise in Chinese equities following the launch of a swap program by China's central bank to bolster the stock market. Meanwhile, the New Zealand dollar (NZDUSD) recovered by 0.43% to $0.6089 after hitting a three-week low at $0.6053 on Wednesday, when the central bank reduced rates by 0.5% and hinted at further easing measures. EURUSD | USDJPY | AUDUSD | DXY | NZDUSD
In commodities, oil prices increased due to escalating tensions in the Middle East affecting oil supply and an increase in demand caused by a major storm hitting Florida. Brent crude futures BRN1! were up by 0.78% to $77.18 per barrel, while U.S. West Texas Intermediate (WTI) futures CL1! rose by 0.83% to $73.85 per barrel. After declining for six straight sessions, gold surpassed the $2,610 per ounce mark on Thursday. Investors are now waiting for the key US CPI data later today to get more insights into the Fed's interest rate projections. Gold prices had recently dropped to their lowest point in almost three weeks as hopes for the Fed to take more assertive policy measures faded. The LME copper contract for three months has increased by 0.3% to reach $9,705.00 per ton.
In soft commodities, Robusta November coffee RC1! closed higher by $9, or 0.2%, at $4,865 per metric ton, rebounding from its lowest point since August 20 at $4,800. Analysts at LSEG noted that following a period of severe drought in key regions of Brazil this year, rainfall is expected to significantly increase from December to February. The precipitation is forecasted to begin affecting Brazil as early as this week. The main concern to watch out for is the risk of potential flooding from the Southeast to the Central-West regions of Brazil, with the primary threat being damage to coffee and sugarcane crops," they added. December arabica coffee KC1! climbed 0.7% to $2.5005 per pound, following a 1.5% increase on Tuesday. Before a crucial U.S. supply-demand report set to be released on Friday, soybeans and corn saw slight increases in trading. The most-active wheat contract on the Chicago Board of Trade ZW1! rose by 1.6% to $6.08-3/4 per bushel, reaching its highest level since Oct. 3 earlier in the day. Soybeans ZS1! inched up by 0.3% to $10.23 per bushel, while corn ZC1! climbed by 0.7% to $4.23-3/4 per bushel. Severe weather conditions are impacting wheat production in major global exporting countries, leading to a decrease in inventories that were already predicted to reach their lowest levels in nine years. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!
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