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27 Feb 2024

The Trade Academy Team

08:00 CET - 3 min read

Tuesday Morning Coffee - Markets Update - 27 Feb 2024 Mixed Fortunes in Asian Markets as Investors Brace for Global Inflation Data

Markets Update: As the financial markets navigate through these events, stakeholders will be attuned to the potential impact on global economic trends and investment strategies.


by TradingView

Global Markets Roundup: 27 Feb 2024

Asian markets faced challenges in advancing on Tuesday, as slightly higher-than-anticipated Japanese inflation added to investor caution ahead of crucial price data releases in Europe and the U.S. later this week. The Japanese yen (USDJPY) stabilized at 150.57 against the dollar, rebounding from a three-month low against the euro (EURJPY). The steady Japanese inflation, aligning with the central bank's 2% year-on-year target, has sustained expectations for an exit from negative interest rates by April. The dollar DXY traded weaker, making gold relatively less expensive for other currency holders.

Tokyo's Nikkei (NI225) edged up 0.4%, establishing a fresh record high, while MSCI's broader Asia-Pacific index (.MIAPJ0000PUS) remained flat, staying below last week's seven-month peak.

In contrast, Wall Street indexes experienced a decline overnight, with S&P 500 (ES1!) and Nasdaq (NQ1!) futures easing 0.1% in morning trade. Investors await the release of the Federal Reserve's core personal consumption expenditures (PCE) price index on Thursday, with forecasts indicating a 0.4% increase. Analysts at ANZ Bank noted that if in line with expectations, this would mark the highest monthly reading since last February, aligning with the Federal Reserve's patient approach. In Europe Euro Stoxx 50 poised to open slightly lower.

Treasuries faced pressure amid rate concerns and substantial auctions totaling $127 billion on Tuesday, followed by an additional $42 billion on Wednesday. However, yields stabilized during the Asian trading session, with ten-year U.S. Treasury yields (US10Y) down 2 basis points at 4.27%, and two-year yields (US2YT=RR) falling four basis points to 4.70% Market sentiment has shifted, delaying the anticipated first Federal Reserve easing from May to June, currently priced at a 70% probability. Futures now suggest slightly over three quarter-point cuts this year, compared to the initial expectation of five at the beginning of the month. On the geopolitical front, U.S. President Joe Biden expressed hope for a ceasefire in the Israel-Hamas conflict in Gaza starting by next Monday, as negotiations between the warring parties progress.

Brent crude futures BRN1! fell 1 cent to $82.52 a barrel by 0435 GMT, while U.S. West Texas Intermediate crude futures (WTI) CL1! rose 1 cent to $77.59 a barrel. This has fueled expectations of a potential easing of policy by the European Central Bank (ECB). While markets are almost fully priced for a first cut in June, ECB President Christine Lagarde and Bank of Greece Governor Yannis Stournaras, in Monday speeches, signaled a cautious approach to immediate cuts. Bank of England deputy Dave Ramsden and Riksbank Governor Erik Thedeen are scheduled to speak later on Tuesday. Additionally, a range of mostly second-tier U.S. and European data, including consumer confidence for Germany, France, and the U.S., are expected.

Currency trade saw subdued activity in early Asian hours, with the Australian dollar (AUDUSD) slipping 0.1% to a one-week low of $0.6530, impacted by a decline in iron ore prices. The New Zealand dollar (NZDUSD) also declined 0.3%, reaching a one-week low as traders scaled back expectations of a potential interest rate hike by New Zealand's central bank at its Wednesday meeting.

The euro (EURUSD) remained steady at $1.0848, while sterling (GBPUSD) dipped to $1.2676. Bitcoin (BTCUSD) experienced a sharp rise overnight following news of software firm MicroStrategy increasing its holdings, holding steady at $54,777. Gold (GOLD) maintained its value at $2,032 per ounce. Spot platinum PL1! climbed 0.6% to $885.20 per ounce, palladium XPDUSD1! edged 0.1% higher to $951.82, and silver XAGUSD1! rose 0.2% to $22.56 per ounce.

The arabica coffee futures for May (KCK24) experienced a decline, closing down by -0.70 (-0.39%), while the ICE robusta coffee futures for May (RMK24) closed down by -10 (-0.33%). The decrease in coffee prices on this day can be attributed to a diminished level of concern regarding dry conditions in Brazil, a key player in the global coffee market.

Looking ahead: the economic calendar is poised for notable events, beginning with the release of key indicators such as the German GfK Consumer Climate, Eurozone M3 Money Supply, and the US Durable Goods Orders. Additionally, market participants will be closely monitoring the Richmond Fed Manufacturing Index, as well as insights from the National Bank of Hungary (NBH) and the publication of the Federal Reserve's Discount Rate Minutes.

Furthermore, the day will unfold with significant commentary from influential figures, including remarks from Federal Reserve's Barr, Bank of England's Ramsden, and European Central Bank's Elderson. The global economic landscape will also be influenced by the release of supply data from Netherlands, United Kingdom, Germany, and the United States.

Investors will keenly observe corporate earnings reports, with notable releases scheduled from Smith & Nephew, Abrdn, Puma, Campari, Banco BPM, and Lowe's. These financial updates are expected to provide valuable insights into the performance and outlook of these prominent companies, contributing to the broader market narrative.

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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