Global Markets Roundup: 16 May 2024

On Thursday, Asia-Pacific (APAC) stock markets experienced a robust rally, propelled by Wall Street's impressive surge to unprecedented levels overnight. This surge came in the wake of a milder-than-expected U.S. inflation report, fostering expectations that the Federal Reserve may implement two interest rate cuts within the year.

Meanwhile, the U.S. dollar continued its decline, slipping to fresh multi-week lows against major currencies such as the euro and sterling. In Tokyo trading, U.S. Treasury yields extended their decline, sinking to six-week lows. This downward trajectory aided the recovery of the yen, despite data revealing a larger-than-anticipated contraction in the Japanese economy during the first quarter. Furthermore, gold prices rallied towards record highs, while crude oil strengthened its gains after a robust rebound from a two-month low.

Wednesday's data unveiled a 0.3% rise in the U.S. consumer price index (CPI) for April, falling short of the anticipated 0.4% increase. This development has bolstered hopes for a 50 basis points rate cut by the Fed this year, with the first quarter-point reduction being fully priced for September, according to FedWatch.

The market's reaction was one of relief, following concerns spurred by higher-than-expected U.S. consumer prices in the first quarter, which had prompted a significant reduction in rate cut expectations and even raised fears of a potential rate hike. MSCI's broadest index of Asia-Pacific shares outside Japan rose by 1.5%, with Hong Kong's Hang Seng HSI and Australia's stock benchmark XJO both rallying approximately 1.6%. Japan's Nikkei NI225 also saw gains of over 1%.

The 10-year U.S. Treasury yield, which tends to correlate with the dollar-yen pair, fell as low as 4.705% for the first time since April 5 in Tokyo trading.

In currencies, the dollar index DXY touched a five-week low of 104.07, while the EURUSD rose to $1.0895, the highest level since March 21, and GBPUSD reached $1.27005 for the first time since April 10. The standout performer among major currencies was Japan's yen, significantly outpacing gains against the dollar. The USDJPY pair slipped by 0.66% to 153.86 from its previous session high of 156.55. AUDUSD was higher, trading last at $0.6685, the NZDUSD also hit a two-month high at $0.6140.

In the commodities market, Brent BRN1! futures rose by 39 cents, or 0.47%, to $83.14 a barrel, while U.S. West Texas Intermediate crude (WTI) CL1! gained 42 cents, or 0.53%, reaching $79.05, building on Wednesday's strong gains. GOLD prices climbed as high as $2,397.32, edging closer to the all-time peak of $2,431.29 recorded on April 12. Three-month copper on the LME HG1! was 1.6% higher at $10,381.50 per metric ton. LME aluminium ALI1! edged 1% to $2,623.50 a ton, nickel NICKEL1! increased 0.7% to $19,630, zinc ZNC1! was trading 0.9% up to $3,004, lead LEAD1! rose 0.6% at $2,283.50 and tin FTIN1! jumped 2.1% to $34,100.

In agricultural commodities, July New York cocoa CC2! ​​was 7.1% up to $7,843 a ton. July London cocoa C2! climbed 6.6% to 6,554 pounds per ton. The most-active wheat contract on the CBOT ZW1! lost 0.2% at $6.64-3/4 a bushel. CBOT soybeans ZS1! traded 0.2% higher at $12.15-1/2 a bushel, while corn ZC1! jumped 0.1% to $4.62-3/4 a bushel. July arabica coffee KC2! was 0.7% lower at $1.994 per lb. July robusta coffee RC2! lost 0.9% at $3,402 a ton. July raw sugar SB1! ​​traded 1.2% lower at 18.65 cents per lb, while August white sugar SF1! lost 1.9% to $542.30 a metric ton.

Looking ahead today, markets anticipate, BoE Financial Stability Review, Italy Inflation Rate, US Building Permits, US Export and Import Prices, US Initial Jobless Claims, US Industrial Production.

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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