Global Markets Roundup: 14 May 2024

Asian-Pacific (APAC) shares surged to their highest level in 15 months on Tuesday, driven by anticipation over forthcoming U.S. inflation figures. Meanwhile, the U.S. dollar maintained its strength as Japanese bond yields experienced a slight uptick following adjustments in the central bank's bond buying program.

In early trading, MSCI's broadest index of Asia-Pacific shares outside Japan climbed marginally, marking its peak since the beginning of 2023. The upward trajectory was fueled by a robust rally in Hong Kong shares, extending a four-week streak of gains. Conversely, Japan's Nikkei NI225 remained relatively flat. However, benchmark 10-year Japanese government bond yields rose by one basis point to 0.95%, reaching their highest level since November. Similarly, five-year Japanese yields hit 0.555%, marking their highest level since 2011. On the global front, world stocks and the S&P 500 SPX remained stable overnight, hovering just below record highs. Notably, a recent survey released by the New York Fed revealed that Americans anticipate inflation to reach 3.3% in a year, up from previous estimates. Later in the day, all eyes will be on U.S. producer price figures for further insights.

Tech giant Alibaba (BABA) is expected to announce its financial results later today. The primary focus of market attention this week centers on Wednesday's release of actual U.S. Consumer Price Index (CPI) data, crucial for gauging whether the first-quarter upside surprises were transitory or indicative of a concerning trend. Projections suggest that core CPI will decelerate from 3.8% in March to 3.6% for April. Commenting on the potential implications, Bob Savage, head of markets strategy and insights at BNY Mellon, noted, "This would be positive, albeit insufficient to confirm Federal Reserve easing plans in the third quarter."

In China, Hong Kong's Hang Seng index surged by 30% from January lows, with nearly a 20% increase recorded over the past month. Recent news and data highlighted a third consecutive monthly rise in consumer prices, better-than-expected imports data, record-low credit growth, and the issuance of a trillion yuan in long-dated special treasury bonds. Investors interpreted these developments as positive demand signals amid indications of monetary policy constraints and reluctance among borrowers, prompting authorities to bolster growth through increased spending. OCBC analysts remarked, Examining recent policy announcements, including the expansion of stock connect and incentives for leading enterprises to list in Hong Kong, it's evident that top management in China aims to restore Hong Kong's prominence as an IPO hub.

In New Zealand, Monday's published data indicated a decline in inflation expectations, while construction supplier Fletcher Building revised its outlook downward, citing a slowdown in the housing market. Consequently, Fletcher's Australia-listed shares plummeted to a two-decade low on Tuesday. Australia's government is poised to unveil another surplus in its annual budget scheduled for release today. Notably, shares of leading Australian automotive equipment seller GUD surged by 9% after the company forecasted meeting expectations.

In Japan, the central bank surprised investors on Monday with its first reduction in bond buying operations since December, signaling a hawkish stance. Consequently, selling pressure intensified in the market, pushing two-year Japanese yields to their highest level since 2009. Meanwhile, U.S. Treasuries remained stable in Asian trade, with 10-year yields at 4.49% and two-year yields at 4.86%.

The dollar index DXY was trading around 105.27. The USDJPY was pivoting around 156.41. The GBPUSD so far is trading 0.5% higher at $1.2559. Elsewhere, the EURUSD held steady at $1.0786, while the AUDUSD and the NZDUSD dollar maintained recent trading ranges, with the Aussie at $0.6606 and the kiwi at $0.6015.

In commodities, Brent crude futures BRN1! was trading 4 cents higher at $83.40 a barrel, while U.S. West Texas Intermediate crude futures CL1! edged 5 cents higher to $79.17 a barrel. Spot gold GOLD was 0.2% higher at $2,340.77 per ounce. Three-month copper on the LME HG1! traded 0.3% lower to $10,154 per metric ton. LME aluminium ALI1! was unchnged at $2,541 a ton, tin FTIN1! was trading flat at $32,905, nickel NICKEL1! lost 0.6% to $19,115, zinc ZNC1! fell 1% to $2,967.50 and lead LEAD1! traded 0.1% down to $2,245.

In agricultural commodities, the wheat contract on the CBOT ZW1! was 0.2% higher at $6.88-1/4 a bushel. CBOT corn ZC1! edged 0.2% up to $4.73-1/4 a bushel. Soybeans ZS1! lost 0.5% to $12.14 a bushel. July New York cocoa CC2! traded 19.4% lower to $7,166 a metric ton. July London cocoa C2! was 20.7% down to 6,000 pounds per ton. July robusta coffee RC2! traded 1.2% lower to $3,399 a ton. July arabica coffee KC2! was 2.5% lower to $1.9605 per lb. July raw sugar SB1! edged 3.5% down, at 18.63 cents per lb. August white sugar SF1! lost 3.4% to $550.00 a ton.

Looking forward today markets anticipate, German ZEW Economic Sentiment Index numbers, US PPI reading, and later in the European afternoon Fed Chair Powell speaks.

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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