Global Markets Roundup: 15 Feb 2024

APAC markets received a boost after major US indices rallied on Wednesday, seemingly shrugging off a hotter-than-expected Consumer Price Index report. The Fed's dovish commentary further fueled risk appetite. Japan in Recession: Despite the positive regional trend, Japan's economy slipped into a technical recession, as confirmed by Q4 GDP data. This raises concerns about the strength of the world's third-largest economy. Europe Gears Up for Gains: European equity futures point to a higher open, potentially mirroring the positive sentiment in Asia and the US. The Euro Stoxx 50 future is up 0.4%, building on Wednesday's cash market gain of 0.4%. Dollar Retreats, Yen Leads G10: The US Dollar (DXY) pulled back slightly after failing to break above the key 105 level. The Japanese Yen emerged as the leader among G10 currencies, benefiting from safe-haven flows associated with Japan's economic struggles.

Australia's ASX 200 climbed on Thursday, led by a surge in tech and real estate stocks. However, gains were capped by disappointing Australian jobs data, which showed a larger-than-expected decline in unemployment. The benchmark index closed up 0.5%, settling at 7,622.70. Japan's Nikkei 225 defied expectations, shrugging off a surprise contraction in Q4 GDP that pushed the economy into a technical recession. The index rallied back above the 38,000 mark, hitting a fresh 34-year high of 38,036.94. Analysts attribute this resilience to continued optimism surrounding corporate earnings and the weak yen, which bolsters exporters. Hong Kong's Hang Seng remained rangebound amid a lack of significant newsflow and continued absence of mainland Chinese participants. The index fluctuated throughout the session, ultimately closing flat at 20,905.49.

FX:

• The US Dollar Index (DXY) lacked direction after retreating from post-CPI highs, failing to break above 105.00.
  
• EUR/USD held steady, awaiting fresh catalysts.
  
• GBP/USD traded flat ahead of key UK data releases.
  
• USD/JPY edged lower but clung to the 150.00 mark despite Japanese recession and improved risk sentiment.
  
• AUD and NZD mirrored the subdued mood, with AUD/USD facing brief pressure after weak Australian jobs data.
  

Fixed Income:

• US 10-year Treasuries continued their recovery on Fed comments moderating post-CPI jitters.
  
• German Bunds remained afloat, briefly topping 134.00 after yesterday's rebound.
  
• Japanese 10-year JGBs gained support after data revealed a surprise technical recession in Japan.
  

Commodities:

• Crude oil futures extended losses from bearish inventory data, but declines were limited by positive risk sentiment and geopolitical tensions.
  
• Spot gold remained rangebound below $2,000/oz despite muted Fed response to recent inflation data.
  
• Copper futures traded sideways, failing to capitalize on improved risk appetite due to China's Lunar New Year holiday.
  

Coffee, Cocoa, Wheat, and Corn: A Market Snapshot

• Arabica Coffee: Prices are currently trading lower, down 0.7% at $2.22 per pound on the ICE Futures US exchange. Concerns over a potential global recession and weaker demand in top consumer countries like Vietnam are weighing on the market. Additionally, expectations of a larger Brazilian crop this year are adding to the bearish sentiment.
  
• Cocoa: Prices are experiencing some volatility, oscillating between gains and losses. Currently, they are up slightly by 0.1% at $2,591 per tonne on the ICE Futures US exchange. News of favorable weather conditions in Ivory Coast, the world's largest cocoa producer, is providing some support, while ongoing concerns about geopolitical tensions in Eastern Europe and their potential impact on global trade are acting as a counterweight.
  
• Wheat: Prices are on the rise, fueled by ongoing worries about supply disruptions from major exporters like Ukraine and Russia. Chicago wheat futures (CBOT) are currently up 2.2% at $8.58 per bushel, reflecting tight global supplies and concerns about the upcoming northern hemisphere planting season.
  
• Corn: Similar to wheat, corn prices are also trending upwards, with CBOT futures currently up 1.5% at $7.22 per bushel. The tight global supply situation for grains, coupled with strong export demand from China, is driving the price increase. Additionally, concerns about dry weather conditions in South America, a major corn producer, are adding to the upward pressure.
  

Busy Data Day Ahead: Investors brace for a data-heavy docket, with key releases including UK GDP Estimate, US NY Fed Manufacturing, US Export & Import Prices, IJC, Philly Fed data, US Retail Sales, IEA OMR, and commentary from various central bank officials.

You can view all markets data and charts here.

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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