Global Markets Roundup: 25 Apr 2024

Stocks in the Asia-Pacific region experienced a downturn on Thursday, driven by disappointing earnings forecasts from Meta Platforms, the parent company of Facebook, which sent shockwaves through the tech sector. Meanwhile, the Japanese yen’s decline past 155 per dollar for the first time since 1990 prompted concerns of potential intervention from Tokyo. Meta Platforms witnessed a significant drop of 15% in its shares during extended trading after announcing lower-than-anticipated revenue projections for the current quarter and increased expenses. This development adversely affected investor sentiment, leading to a sell-off in U.S. tech and tech-related stocks.

The repercussions were felt across Asian tech stocks, as evidenced by the decline in MSCI's broadest index of Asia-Pacific shares outside Japan by 0.7%. Japan's Nikkei slid 1.3%, while China's stock market also experienced losses, with the blue-chip CSI300 index down 0.3% and Hong Kong's Hang Seng Index 0.5% lower. The focus remains on key tech players such as Alphabet GOOG, Microsoft MSFT, and Intel, slated to report earnings later on Thursday. In addition to corporate earnings, investor attention is drawn to the release of first-quarter U.S. gross domestic product data and personal consumption expenditures, a vital inflation metric for the Federal Reserve, on Friday.

Following a hotter-than-expected consumer price inflation report for March, market expectations regarding the timing of Fed interest rate cuts have shifted, with a 70% chance of a commencement in September, according to the CME FedWatch Tool. This adjustment has impacted Treasury yields and the dollar, with the dollar index up over 4% this year.

The yen, sensitive to U.S. Treasury yields, has depreciated by 9% this year, reaching 155.445 per dollar on Thursday, its lowest level in 34 years. This breach of the key 155 yen level raises concerns of potential intervention from the Bank of Japan (BOJ), which commenced its two-day rate-setting meeting on Thursday.

BOJ Governor Kazuo Ueda's comments are eagerly anticipated as he navigates a path towards exiting ultra-easy monetary policies without destabilizing the currency. The BOJ remains cautious following the 2022 episode, where dovish remarks from the former governor triggered a yen plunge, necessitating intervention. Market observers, suggest that the Ministry of Finance may intervene should the USDJPY pair continue to rise after the BOJ meeting, especially amidst hints from Finance Minister Suzuki regarding intervention readiness. Despite no active discussions within Japan's ruling party regarding intervention thresholds, the yen's slide towards 160 to the dollar could prompt policymakers to take action, according to party executive Takao Ochi.

In currencies, the dollar DXY was little changed at 105.75. The EURUSD was trading at $1.0702, while GBPUSD was 0.01% lower at $1.2463. The AUDUSD traded around $0.6500. The NZDUSD rose 0.08% to $0.5940.

In commodities, oil prices experienced slight declines amid concerns over a potential U.S. economic slowdown outweighing fears of escalating Middle East tensions. U.S. crude fell CL1! to $82.74 per barrel, while Brent BRN1! stood at $87.99. Spot GOLD saw a modest increase to $2,320.32 an ounce. Three-month copper on the LME HG1! rose 0.2% at $9,795.50 per metric ton, while the June copper contract on the SHFE HG1! rose 0.7% to 79,210 yuan ($10,932.15) a ton. In agricultural commodities, the wheat contract on the CBOT ZW1! was down at $6.12-3/4 a bushel. Corn ZC1! traded 0.3% lower to $4.47-1/4 a bushel and soybeans ZS1! were 0.1% lower to $11.74-3/4 a bushel. July arabica coffee (KCN24) rose +1.83%, and May ICE robusta coffee (RMK24) climbed +6.46%. July London cocoa C2! rose 4.1%, at 9,487 pounds per metric ton.

Looking ahead today, markets anticipate, Gfk German Consumer Confidence, US GDP Growth Rate, US Pending Home Sales.

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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