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28 Mar 2024

The Trade Academy Team

07:35 CET - 3 min read

Thursday Morning Coffee - Markets Update -28 Mar 2024 - Yen Under Scrutiny Amid Speculation of Intervention; APAC Markets Tread Cautiously

Markets Update: Global markets held their breath on Thursday with the yen near record lows and Asian equities subdued ahead of key US inflation data, while central bank intervention and Easter weekend closures loomed.


by TradingView

Global Markets Roundup: 28 Mar 2024

On Thursday, the yen hovered near its lowest levels in decades, prompting vigilance from investors amid looming prospects of intervention by Japanese authorities. Concurrently, APAC equities exhibited a subdued performance as market participants awaited a crucial U.S. inflation data release. With anticipation building for Friday's unveiling of the U.S. core personal consumption expenditures (PCE) price index, regarded as the Federal Reserve's favored gauge of inflation, trading remained relatively rangebound. However, the forthcoming Easter weekend, leading to closures in many markets, is expected to limit the immediate impact of the data.

The previous day, Japan's principal monetary authorities convened for an emergency session to address concerns over the yen's weakness, signaling readiness to intervene to counter what they deemed as disorderly and speculative movements in the currency. This resolve follows a series of verbal warnings from officials, with Finance Minister Shunichi Suzuki underscoring the commitment to take "decisive steps" against excessive currency fluctuations. Notably, the last intervention by Japanese authorities to bolster the yen occurred in 2022, preceded by similar verbal assurances. Christopher Wong, a currency strategist at OCBC O39, remarked on the significance of the magnitude of yen movements, emphasizing that despite verbal intervention, the risk of actual intervention remains palpable.

The yen's depreciation has provided impetus to Japan's Nikkei 225 index, which has seen a month-to-date increase of approximately 3%, despite a slight 1% dip on the day, holding close to its record high. In contrast, Chinese stocks faced downward pressure, driven by substantial selling by foreign investors amid lingering apprehensions regarding the outlook for the world's second-largest economy. The CSI300 index dipped to a one-month low, while the Shanghai Composite struggled below the psychologically crucial 3000-point threshold. The yuan, facing downward pressure due to expectations of further monetary easing by Beijing to support China's fragile economic recovery, remained relatively stable near a four-month low against the dollar. Meanwhile, Hong Kong's Hang Seng Index exhibited marginal movement, with a surge in technology firms offsetting declines in property names. Against this backdrop, MSCI's broadest index of Asia-Pacific shares outside Japan closed marginally lower. In European pre-market EURO STOXX 50 Futures trade in green, pointing out on a positive market open.

In the currency markets, the dollar (DXY) retained strength, buoyed in part by remarks from Fed Governor Christopher Waller signaling no immediate urgency to ease interest rates. While markets continue to price in a probability of over 50% for a first Fed rate cut in June, similar expectations loom for the European Central Bank and the Bank of England that month. The euro EURUSD and sterling GBPUSD softened against the dollar, while the New Zealand dollar slumped to a four-month low. Attention remained fixated on the yen, which held steady at 151.30 per dollar (USDJPY), maintaining proximity to its recent three-decade low of 151.975.

Meanwhile, in commodities, oil prices experienced marginal gains, with Brent and WTI U.S. crude edging up amid ongoing market dynamics. Three-month copper on the London Metal Exchange (LME) HG1! rose 0.7% to $8,907.50 per metric ton by 0334 GMT, while the most-traded May copper contract on the Shanghai Futures Exchange (SHFE) HG1! advanced 0.7% to 72,550 yuan ($10,041.24) a ton. On Thursday, the price of gold remained steadfast, resting just below the significant threshold of $2,200 per ounce. The most-active soybean contract on the CBOT ZS1! was down 0.1% at $11.91 a bushel by 0243 GMT, while CBOT wheat ZW1! fell 0.1% to $5.47-1/4 a bushel and corn ZC1! slipped 0.1% to $4.26-1/2 a bushel. July London cocoa C2! ​rose 0.7% to 7,663 pounds per metric ton after hitting its latest record on Tuesday at 8,009 pounds. May arabica coffee KKC1! was little changed at $1.8805 per lb​​.

Looking forward today, markets anticipate, UK Business Investment Report, UK GDP Growth Rate, German Retail Sales, German Unemployment Rate, US Continuing Jobless Claims, Initial Jobless Claims, US GDP and 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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