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03 Apr 2024

The Trade Academy Team

08:01 CET - 3 min read

Wednesday Morning Coffee - Markets Update - 03 Apr 2024 - APAC Markets Decline Amidst U.S. Yield Strength and Taiwan Earthquake

Markets Update: APAC markets dipped on concerns about slower Fed rate cuts and a powerful earthquake in Taiwan, while oil prices rose and gold hit a record high.


by TradingView

Global Markets Roundup: 03 Apr 2024

On Wednesday, Asia-Pacific (APAC) markets mirrored the downturn seen on Wall Street, primarily influenced by the robust U.S. yields hovering near a four-month peak. Furthermore, concerns surged following a potent earthquake striking Taiwan, igniting fears of potential disruptions within the critical chip-making sector. The market sentiment also grapples with the looming possibility of decelerated rate cuts, a notion spurred by upcoming U.S. data releases and an imminent appearance by the world's most influential central banker. Oil prices continued their upward trajectory, while gold reached yet another record high. The MSCI's comprehensive index of Asia-Pacific shares outside Japan declined by 0.7%. Japan's Nikkei NI225 witnessed a 1% drop subsequent to a remarkable 20% surge in the initial quarter.

In Taiwan, the TAIEX shares skidded by 0.8% following a powerful earthquake measuring 7.2 in magnitude that jolted Taipei, prompting a tsunami warning for the southern Japanese islands and the Philippines. Taiwan Semiconductor Manufacturing Co (.TSMC) observed a 1.4% decline in its shares after confirming evacuations from some facilities due to the seismic activity. Meanwhile, China's blue chips (.CSI) experienced a 0.3% dip, and Hong Kong's Hang Seng index HSI fell by 0.6%, notwithstanding a private survey indicating an acceleration in the services industry growth throughout March.

On Wall Street, a string of favorable U.S. economic indicators, such as unexpected manufacturing sector expansion and gradual labor market improvement, instigated skepticism regarding the extent of Federal Reserve easing anticipated for this year and the next. Two Federal Reserve policymakers suggested the plausibility of three U.S. interest rate cuts within the year, yet market projections for easing only amounted to approximately 69 basis points. The major Wall Street indexes DJI, SPX, IXIC collectively receded by approximately 0.7% to 1%. Tesla TSLA shares endured a 5% decline subsequent to a quarterly delivery downturn, marking the first in nearly four years. Long-term Treasury yields surged to multi-month peaks initially before retracting slightly. The benchmark 10-year yield US10Y rested at 4.3471% on Wednesday, having touched a four-month pinnacle of 4.405% overnight. In Europe the Euro Stoxx 50 futures drop -0.10% in the pre-market.

In the currency markets, despite elevated yields, the dollar failed to gain traction but retained dominance against major counterparts. The yen USDJPY hovered around 151.50 per dollar, narrowly missing the 152 threshold that triggered authorities' intervention in late 2022. The euro EURUSD rose 0.06% to $1.07760, while sterling GBPUSD howers around $1.2580. The dollar was steady at 104.72 DXY. The Aussie AUDUSD rose 0.04% to $0.6520, while the kiwi NZDUSD moved 0.03% higher to $0.5972.

In commodities and metals, oil prices rallied for the fourth consecutive day amidst escalating geopolitical tensions, heightening concerns over tightened supplies ahead of an OPEC+ meeting, where no changes to output policy are anticipated. Brent BRN1! slid by 0.2% to $87.18 a barrel, while U.S. crude CL1! dipped by 0.3% to $83.21 per barrel. Gold prices extended their record-breaking streak on Wednesday, with spot GOLD reaching an all-time high of $2,288.09 per ounce earlier in the session before encountering profit-taking, stabilizing at $2,277.99. Three-month LME copper HG1! traded up 0.7% at $9,056.50 per metric ton. The most-traded May SHFE copper contract HG1! closed up 0.9% at 73,780 yuan ($10,198.36) per ton, rising for a fifth session in a row.

In soft commodities, The most-active wheat CBOT contract ZW1! was down 0.6% at $5.42 a bushel. CBOT soybeans ZS1! trade flat at $11.73-1/2 a bushel and corn ZC1! edged 0.3% up to $4.27-3/4 a bushel. July London cocoa C2! was up 2.2% at 7,892 pounds a metric ton. May robusta coffee RC1! jumped 5.3% higher to $3,663 a ton, a record high. May arabica coffee KC1! rose 3.1% to $1.9775 per lb.

Looking forward to today's important economic events:

  • EZ CPI (Eurozone Consumer Price Index): This is a major inflation indicator for the Eurozone, with implications for the European Central Bank's (ECB) monetary policy decisions. A higher-than-expected CPI could influence interest rate hikes.
  • Italian Unemployment Rate: This reflects the health of the Italian labor market and overall economy. Changes in the unemployment rate could affect sentiment about the Eurozone.
  • US ADP Employment Change: A key private-sector jobs indicator that often serves as a pre-cursor to the broader Non-Farm Payrolls report. Strong figures could influence stock markets and the Federal Reserve's interest rate plans.
  • ISM Services PMI: The Institute for Supply Management's Services Purchasing Managers' Index signals expansion or contraction in the US service sector. It's a valuable gauge of economic health.
  • OPEC+ JMMC Meeting: The Joint Ministerial Monitoring Committee of OPEC+ could make production decisions influencing global oil prices.
  • Comments from Fed’s Powell, Bowman, Goolsbee, Barr, & Kugler: Speeches by Federal Reserve officials can provide insights into monetary policy direction, influencing interest rates and markets.
  • Supply from Germany: Germany might issue government bonds, further impacting the Eurozone bond market.

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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