Global Markets Roundup: 05 March 2024

In Tuesday's trading session, the Asia-Pacific (APAC) stock markets exhibited a mixed performance as investors absorbed the implications of China's Work Report and Caixin Services PMI data. China's government work report, unveiling a 2024 GDP growth target of approximately 5%, met expectations.

In equity markets, the ASX 200 experienced a marginal dip, primarily driven by contrasting performances in the mining and health care sectors against losses in consumer-related industries. The Nikkei 225 faced an initial setback as it slipped below the 40,000 level, spurred by Tokyo's Consumer Price Index (CPI) data indicating an uptick in inflation. However, the market exhibited resilience, gradually recovering its losses and ultimately finishing the day in positive territory. The Hang Seng and Shanghai Composite indices displayed a mixed performance. Hong Kong's benchmark struggled, particularly in the technology and health care sectors. The setback was further compounded by a less-than-expected Chinese Caixin Services Purchasing Managers' Index (PMI), introducing a headwind for risk appetite. Conversely, the mainland market managed to stay afloat despite these challenges. The government's Work Report, featuring the retention of the GDP growth target at approximately 5%, as anticipated, contributed to this stability. European equity futures suggest a slightly softer start, with Euro Stoxx 50 futures down 0.3% following a 0.4% increase in the cash market on Monday.

In the currency markets, Federal Reserve's Bostic remarked that if rate cuts are initiated, they will not be consecutive but are likely to be followed by a pause. Bostic anticipates two rate cuts this year, with the first expected in the third quarter. The Dollar Index (DXY) continues to trade below the 104 level, USD/JPY hovers around 150.50, and EUR/USD remains steady around 1.0850. The GBP/USD currency pair exhibited a lateral movement as market participants awaited the forthcoming Budget announcement in the United Kingdom, with a particular focus on the anticipated tax cuts. Meanwhile, currencies in the southern hemisphere experienced slight depreciation amidst a nuanced risk sentiment. Despite a larger-than-expected Current Account surplus and Net Exports Contribution in Australia, the AUD/USD pair failed to capitalize on these positive economic indicators. The resilience of the Australian dollar is notable, considering the upcoming release of tomorrow's GDP data, adding an element of uncertainty to the currency's performance.

In commodities crude futures demonstrated resilience following the previous day's losses, maintaining stability amidst a cautious risk sentiment prevailing in the market. Meanwhile, spot gold experienced a leveling off, consolidating its position after a recent surge that saw it breach the USD 2,100 per ounce threshold. Copper futures, on the other hand, displayed a lackluster performance as market participants absorbed the implications of China's Work Report. In the report, the official GDP growth target was affirmed at approximately 5%, in line with expectations. However, it was underscored that attaining this target would pose considerable challenges, injecting an element of caution into the market's outlook.

In the soft commodity markets, Arabica coffee futures for May delivery (KCK24) exhibited a positive trend, concluding the trading session with a gain of +3.60 points or +1.96%. Concurrently, May ICE robusta coffee futures (RMK24) also experienced an upward movement, recording an increase of +46 points or +1.46% at the close of the session. These developments reflect a notable shift in market dynamics and may be indicative of various factors influencing coffee prices. Analysts and market participants are closely monitoring these trends for potential insights into the broader economic and agricultural landscape. In Tuesday's market session, the May ICE NY cocoa futures (CCK24) exhibited a notable uptrend, closing with a gain of +259 points, equivalent to a 4.09% increase. Similarly, the May ICE London cocoa #7 (CAK24) also experienced positive momentum, concluding the trading day with a robust increase of +264 points, marking a 4.98% rise. This upward movement in cocoa futures reflects a bullish sentiment within the market, as investors respond to evolving factors influencing cocoa prices.

Looking ahead, key events include the release of Purchasing Managers' Index (PMI) data for the Eurozone, the United Kingdom, and the United States, as well as Eurozone Producer Prices and U.S. economic indicators such as IBD/TIPP Economic Optimism, Durable Goods, and the ISM index. Additionally, it is noteworthy that Tuesday marks the U.S. Primary "Super Tuesday," a significant day in the political calendar. Investors will also pay attention to comments from the Federal Reserve's Barr and monitor supply-related developments from the United Kingdom and Germany.

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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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