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06 Mar 2024

The Trade Academy Team

08:00 CET - 3 min read

Wednesday Morning Coffee - Markets Update - 06 Mar 2024 - APAC Markets - Tech Wobbles, But Hong Kong Outperforms; WTI Up Despite Inventory Build

Markets Update: The global energy and commodities landscape witnessed measured fluctuations, reflecting a cautious market sentiment despite the bullish-leaning private sector inventory data.


by TradingView

Global Markets Roundup: 06 Mar 2024

In the APAC region, stock markets exhibited volatility, initially facing downward pressure following declines in the technology sector in the United States. Super Tuesday projections suggest a potential rematch in the upcoming US presidential election between incumbent President Biden and former President Trump.

In equities on Wednesday, the financial markets witnessed a downturn as major indices experienced declines. The S&P 500 registered a 1% decrease, and the Nasdaq Composite incurred a more substantial loss of 1.7%. Meanwhile, the Dow Jones Industrial Average recorded a 1% decline, translating to a roughly 405-point drop. This downward trend reflected a challenging day for investors as market dynamics played a pivotal role in shaping the day's trading outcomes. The ASX 200 exhibited a rangebound trading pattern, with the financial sector mitigating losses in the technology sector. Concurrently, GDP data presented an inconclusive picture. The Nikkei 225 experienced an initial gap below the crucial 40,000 level during the opening session, only to subsequently recover a significant portion of the losses incurred. In Hong Kong, both the Hang Seng and Shanghai Composite demonstrated resilience by overcoming early caution. Notably, Hong Kong's market outperformed, driven by strong performances in the technology and healthcare sectors. Meanwhile, the mainland Chinese market adopted a more cautious approach, influenced by ongoing US-China frictions and a degree of pessimism related to growth prospects. Turning to European markets, futures indicate a modestly positive opening, with Euro Stoxx 50 futures showing a 0.1% increase. This follows a 0.4% decline in the cash market on Tuesday.

The Currency markets observed a relatively uneventful performance by the US Dollar Index (DXY), hovering around the 103 handle. The EUR/USD exhibited a lackluster performance as it hovered near the lows observed on the previous day, maintaining a fluctuating trend around the 1.0850 level. Simultaneously, the GBP/USD experienced a brief dip below 1.2700, anticipating the imminent Spring Budget announcement. The USD/JPY pair experienced fluctuations, trading on both sides of 150.00, while other currencies from the Asia-Pacific region, outperformed. The Australian and New Zealand dollars, respectively, underwent oscillations between gains and losses during the trading session. This market volatility was influenced by the prevailing uncertain sentiment and the release of Australian GDP data. The interpretation of the data varied depending on the source, with some news outlets describing it as mixed, while others reported it as meeting expectations. The People's Bank of China (PBoC) played a significant role in the foreign exchange market by setting the USD/CNY mid-point at 7.1016, contrary to the expected value of 7.1939 and a slight deviation from the previous day's mid-point of 7.1027. This unexpected adjustment contributed to the evolving dynamics in the currency markets on this particular day.

In commodities on Wednesday, crude futures saw marginal gains, maintaining a subdued price action despite positive private sector inventory data. According to the latest US Energy Inventory Data, crude inventories increased by 0.4 million barrels, falling below the expected 2.1 million barrels. Gasoline, on the other hand, exhibited a decrease of 2.8 million barrels, surpassing the anticipated decline of 1.6 million barrels. Distillate inventories also showed a reduction of 1.8 million barrels compared to the projected 0.7 million barrel decrease, while Cushing experienced a modest increase of 0.5 million barrels. In the global oil market, Saudi Arabia has set the April Arab light crude Official Selling Prices (OSP) to Asia at Oman/Dubai + USD 1.70/bbl and to Northwest Europe at ICE Brent + USD 0.30/bbl. The OSP to the United States has been established at ASCI + USD 4.75/bbl. Meanwhile, Ukraine has taken a firm stance, ruling out any commercial agreements that would permit the continued flow of Russian natural gas through the country after the current transit deal concludes at the end of the year. This information was disclosed by a Ukrainian official at an industry event, as reported by Bloomberg. In the precious metals market, spot gold exhibited a momentary pause and leaned toward $2,120 after recently reaching new record highs. Turning attention to base metals, copper futures remained rangebound amid predominantly indecisive risk sentiment in the Asian markets.

In soft commodities Coffee prices experienced a modest decline, influenced by a resurgence in coffee supplies monitored by the Intercontinental Exchange (ICE). The upswing in ICE-monitored arabica inventories reached a notable four-month high, totaling 381,107 bags. Additionally, robusta coffee inventories, also overseen by ICE, attained a three-week peak on the preceding Wednesday. This surge in monitored supplies has contributed to a downward pressure on coffee prices in the market. Cocoa prices experienced a moderate decline, driven by anticipations of beneficial rainfall in West Africa throughout the week, particularly favoring the mid-crop in the Ivory Coast. This meteorological forecast prompted a notable occurrence of long liquidation in cocoa futures during the day. It is noteworthy that Ivory Coast cocoa farmers are gearing up to commence the mid-crop cocoa harvest in the upcoming month. Meanwhile, Wheat prices experienced a notable downturn, reaching a 3.5-year low at 539.50 US dollars per bushel. This recent decline underscores a broader trend, as wheat has witnessed a substantial loss of 10.33% over the past four weeks. Furthermore, the market data reveals a more prolonged downturn, with a 22.66% decrease in the commodity's value over the course of the last 12 months. This decline in wheat prices reflects ongoing challenges and dynamics within the global market, warranting careful observation and analysis by industry stakeholders and investors alike.

Looking ahead to the economic calendar, noteworthy events include German Trade data, Eurozone Retail Sales, US ADP Employment Report, Wholesale Inventory and Job Openings and Labor Turnover Survey (JOLTS). Additionally, markets await policy announcements from the Bank of Canada (BoC) and the National Bank of Poland (NBP), the release of the Federal Reserve Beige Book, the UK Budget, and comments from Federal Reserve Chair Powell, along with officials Daly and Kashkari.

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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