Global Markets Roundup: 11 Apr 2024

APAC shares took a downward turn on Thursday, mirroring losses seen on Wall Street, as persistent U.S. inflation pressures prompted market participants to recalibrate expectations for Federal Reserve intervention this year. The resulting surge in the dollar saw it reaching a 34-year high against the yen. U.S. stock futures dipped by 0.2% following a roughly 1% decline in Wall Street indices overnight. Concurrently, regional bond markets suffered, with Treasury yields climbing 20 basis points to their loftiest levels since November. MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) retreated by 0.7%, while Japan's Nikkei NI225 recorded a decrease of 0.8%. China's blue-chip stocks experienced a 0.4% drop, and Hong Kong's Hang Seng index fell by 1.1%, in response to data revealing a mere 0.1% increase in consumer prices for March, falling short of market expectations. The latest U.S. inflation figures, released overnight, surpassed estimates once again, extinguishing hopes for a rate cut in June. Core Consumer Price Index (CPI) rose by 0.4%, exceeding forecasts of a 0.3% uptick. In European pre-market EURO STOXX 50 Index Futures FESX1! trades slightly lower.

The release of Fed minutes overnight underscored concerns among officials that progress in containing inflation had stalled even before March's data. Some policymakers raised doubts about the adequacy of the current policy rate. Investor sentiment, previously anchored to expectations of a June rate cut, now anticipates easing to commence in September. Projections for total easing this year fell to 42 basis points, notably lower than the Fed's forecast of 75 basis points. The probability of the Fed refraining from rate cuts in 2024 surged to 13% from 2.1%, according to CME FedWatch.

In the currency markets, the dollar (DXY) remained robust at a five-month peak against major counterparts at 105.17, propelled by a 1.1% surge overnight—the most significant daily gain in over a year. The greenback's ascent extended to a 34-year high against the yen at 153.24 USDJPY before retracing marginally to 152.86 yen on Thursday, amid speculation of government intervention to stem the yen's decline. Sterling was last at $1.2538, up 0.06% on the day. The Australian dollar was little changed at $0.651, while the New Zealand dollar eased 0.17% to $0.598. The EURUSD was last at $1.0744, ahead of the European Central Bank meeting later in the day.

Asian bond markets continued to mirror the sell-off in Treasuries. Australia's 10-year government bond yield rose by 13 basis points to 4.243%, reaching levels last seen in mid-February. Similarly, Japan's 10-year bond yield climbed 4 bps to 0.83%, marking its highest since early November. Meanwhile, U.S. Treasuries stabilized on Thursday, with the benchmark ten-year yield holding steady at 4.5395% after an overnight surge of 18 bps. The two-year yield remained unchanged at 4.9604% following a 22 bps rise in the previous session.

In commodities, oil prices maintained gains, spurred by concerns that ceasefire negotiations might falter following an Israeli strike that claimed the lives of three sons of a Hamas leader. Brent crude edged up by 0.1% to $90.62 a barrel, while WTI U.S. crude rose by the same margin to $86.35 per barrel. Gold prices rebounded by 0.3% to $2,338.79 per ounce, partially recovering from an overnight decline of 0.8% attributed to the strength of the U.S. dollar. Copper futures on the London Metal Exchange witnessed a notable rebound, climbing 0.5% to reach $9,422.50 per metric ton. This positive movement comes as a reversal from the losses observed during the previous session.

Meanwhile, in the coffee sector, May arabica coffee (KCK24) saw an increase of +1.10 (+0.52) at the close of Wednesday's trading. Similarly, May ICE robusta coffee (RMK24) experienced a rise of +49 (+1.31%). Turning to the cocoa market, July London cocoa settled up 209 pounds, or 2.6%, to 8,105 pounds per metric ton, marking a significant surge. Notably, the market reached a record high of 8,168 pounds during the session. The most-active corn contract on the CBOT registered a modest uptick of 0.1%, settling at $4.34-3/4 a bushel. Conversely, wheat futures declined by 0.5%, reaching $5.56 a bushel. Soybeans, on the other hand, remained steady, maintaining a flat position at $11.64-3/4 a bushel.

Looking ahead, attention now shifts to U.S. producer price data and the European Central Bank (ECB) policy meeting later in the day.

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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

Rating: Mixed Outlook

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