Global Markets Roundup: 11 June 2024

Sydney: Asia-Pacific stocks saw limited movement on Tuesday as investor sentiment took a cautious turn. Fresh political uncertainty in Europe, fueled by right-wing gains in elections and a potential snap poll in France, raised concerns about the European Union's cohesion.

The broader MSCI index for Asia-Pacific shares outside Japan (.MIAPJ0000PUS) dipped slightly by 0.4% in thin trading. Chinese blue chips (3399300) fared worse, dropping 0.7%.

However, Japan's Nikkei NI225 defied the trend, rising 0.3%, and South Korea's KOSPI also gained 0.5%.

European markets appeared to stabilize after Monday's selloff. EUROSTOXX 50 futures FESX1! edged up 0.2%, and FTSE futures (Z1!) saw a modest 0.1% increase. The recent rise of right-wing parties in Europe, particularly the potential for a strong showing by France's National Rally in a snap election, has unnerved investors. This has caused jitters in the eurozone, with French government debt and stocks experiencing turbulence. Bond yields across Europe climbed, with the spread between French and German debt widening significantly.

Elsewhere, Apple's AAPL much-anticipated announcement of its AI strategy, integrating "Apple Intelligence" across its apps, received a muted response from the market. The iPhone maker's shares continued their downward trend, dropping 0.3% in after-hours trading after a 1.9% decline during regular hours.

U.S. stock futures also saw slight declines in Asian trading, with S&P 500 futures ES1! and Nasdaq futures (NQ1!) both down 0.1%. This comes despite Monday's gains, which were fueled by the market's surprising resilience to the recent rise in U.S. yields triggered by Friday's strong jobs report. Analysts at JPMorgan acknowledged the diminished prospects for Federal Reserve rate cuts this year, revising their forecast for the first cut to November. They expressed concern about the market's apparent disregard for various risks, including political uncertainties, geopolitical tensions, and potential froth in meme stocks and cryptocurrency trading. This led them to recommend a defensive approach for investment portfolios.

Focus on the Fed

Market watchers are keenly awaiting the outcome of the Federal Reserve's policy meeting on Wednesday, particularly regarding the number of rate cuts projected in the "dot plot." While the Fed is expected to maintain current rates, the question remains whether it will retain its forecast of three rate cuts for 2024. Analysts at Goldman Sachs predict the "dots" will reflect two cuts in 2024, followed by four in 2025 and three in 2026, with a slight increase in the long-term neutral rate. However, they acknowledge the possibility of a one-cut baseline scenario, especially if core CPI data released on Wednesday shows a higher-than-expected rise.

Other Market Movements

The euro steadied around $1.0766 EURUSD after reaching a one-month low overnight. The U.S. dollar remained strong against the yen at 157.17 yen USDJPY, nearing its May peak. This has fueled speculation that the Bank of Japan (BoJ) might consider tapering its bond-buying program at its meeting on Friday, potentially paving the way for a future rate hike. Gold prices hovered near one-month lows at $2,306 an ounce GOLD, reflecting the market's reduced expectations for U.S. rate cuts.

Oil prices CL1! consolidated modest gains from Monday, with some investment banks predicting strong summer demand and potential U.S. purchases for its strategic reserves. Investors are also awaiting key oil supply and demand data releases from various agencies this week.

In agricultural commodities (Prices and Charts), wheat, soybeans and corn gained in the last session, while coffee, cocoa, and sugar prices fell.

Looking ahead today, markets anticipate, Retail Sales from Turkiye, ECB Officials Speeches, Manufacturing Production from SAR, Mexico Industrial Production, Inflation Rate from Brasil, Russia Balance of Trade, US 10-Year Note Auction, API Crude Oil Stock Change.

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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