Daily Market News by Golden Brokers

DAILY MARKET NEWS – 12-06-2024​

China's consumer inflation was reported to remain steady at 0.3% in May, matching the previous month's rate. However, the underlying trend suggests the necessity for Beijing to take extra measures to improve domestic demand and support the uneven economic recovery across sectors. The producer price index declined to 1.4% in May, down from 2.5% in April. Economists warn that deflationary pressure remains an issue, with the slight improvement in producer prices driven by commodity prices rather than domestic demand. China also stopped buying gold in May after an 18-month shopping spree that saw prices climb to record highs.

EQUITY

Wall Street has seen indexes reach new record highs, although the Dow fell slightly. Apple's stock price climbed 7% after unveiling its AI strategy, although industry players warned of privacy and security concerns. Oracle's has also benefited from its new partnerships with OpenAI and Google Cloud for AI infrastructure, albeit missing quarterly earnings. Asian markets were mixed, with Chinese stocks slipping on potential U.S. trade sanctions targeting Chinese chip resellers supplying Russia.

GOLD

Gold remained flat on Wednesday, awaiting the FOMC and the May inflation report. The market is divided on whether the Fed will cut rates once or twice this year, with attention focused on the central bank's updated economic projections and Chair Jerome Powell's press conference. Buying pressure has also subsided with the Chinese central bank pausing its gold purchase.

OIL

Oil prices stable on Tuesday after brent rebounding from 4-month lows to above $80 a barrel. The U.S. Energy Information Administration (EIA) raised its global oil demand growth forecast for 2024 to 1.1 million barrels per day, up from its previous estimate of 900,000 bpd. Similarly, OPEC maintained its outlook for solid global oil demand growth this year, driven by increased travel and tourism in the summer.

CURRENCY

The greenback steadied above 105.2 ahead of the US inflation report and FOMC. The index had gained over 1% since Friday, supported by job data, changing expectations to only one rate cut from the Fed this year, with a September move becoming less likely. The Japanese yen’s further weakened against the dollar, with the Bank of Japan expected to keep interest rates untouched. As the 2024 US election season approaches, rising tensions between China and the US could be a negative factor leading to a creep-up in the dollar against the offshore yuan.
 

DAILY MARKET NEWS – 13-06-2024​

Two big news stories swept across the market yesterday, the first being the consumer inflation rate that came in lower than expected and the federal reserve with another pause with another month to complete a full year of static rates. However, they did reduce their projected rate cuts for 2024 to just one quarter point mitigation, down from the three cuts estimated in March. The central bank acknowledged "modest further progress" towards its 2% inflation target even as the market pointed out the complexity of job data last week. Fed Chair Jerome Powell emphasised that a single rate cut would have little impact on the economy, and that the overall policy path was more important.

EQUITY

The stock market shrugged off the hawkish comment from Fed Chair Powell and clocked in cheeky gains, with the S&P 500 topping 5,400 for the first time in its history. The technology sector led the gainers among sectors, while energy posted the steepest loss. Nike shares fell 2.3% after a trademark application for "footware" was dismissed by the European Union court. However, the market is supported by Oracle, which surged by 13%, after the software maker gave an outlook for annual growth.

GOLD

Gold prices declined after an initial leg up from CPI data following the Federal Reserve's updated economic projections, with only one interest rate cut expected for the remainder of 2024. This revision came against lower inflation data for May. This hawkish stance led to a stronger dollar and higher bond yields, which weighed on gold prices. However, some analysts argue the Fed's projections may already be outdated given the improving inflation numbers, and Goldman Sachs has reinstated confidence in two rate cuts.

OIL

Oil prices reacted to the U.S. Federal Reserve's decision to delay rate cuts until December rather inversely compared to other commodities. The decision impaired expectations for higher economic growth and oil demand. Additionally, higher U.S. crude and fuel inventories weighed on the market, further complicating the demand outlook. In calm waters, Houthi militants continued their attacks on international shipping in the Red Sea, taking responsibility for recent watercraft and missile strikes, although they no longer bear weight on the market.

CURRENCY

The U.S. dollar was volatile yesterday; it initially fell on lower U.S. inflation data but later recovered its losses after the Fed's hawkish stance with its projection. However, markets still expect nearly two rate cuts in 2024 on the basis of lower inflation growth and job data. The yen remained under pressure ahead of the BoJ policy meeting on Friday, expecting a reduction in bond purchases. The market now looks for a clue in the Producer Price Index (PPI) and jobless claims for the next catalyst.
 

DAILY MARKET NEWS – 14-06-2024​

The Labour Department reported that new unemployment benefit claims reached a 10-month high in May while producer prices in May fell below expectations, raising hopes for a Federal Reserve interest rate cut in September despite the Fed's changing forecast in its latest meeting. The unemployment rate increased to 4% in May, but Fed Chair Jerome Powell said labour market conditions are back to pre-pandemic levels, while Treasury Secretary Janet Yellen sees the job market as more normal now, with slower wage growth and higher labour force participation. A deeper dive into the data shows that it was driven by lower energy costs and a drop in wholesale gasoline prices, while service costs remained unchanged.

EQUITY

The U.S. stock markets continued their record-breaking streak, while Asian stocks fell as the U.S. inflation-driven rally wound down, with Chinese markets hit hardest after the European Union applied up to 38% tariffs on major electric vehicle makers. Tesla is up 3% after shareholders approved Elon Musk's $56 billion pay package and the company's relocation to Texas after a Delaware court initially blocked the pay package.

GOLD

The gold market has gone through strong volatility in response to the producer price index and jobless claims. The Fed's updated interest rate projections strongly resisted the dollar weakness suggested by the unexpected fall in U.S. producer prices in May. The market's reaction to these developments has been mixed, with traders currently seeing a 60% probability of a rate cut in September.

OIL

Oil prices snapped on Thursday but were on track for their best week in over two months, with both Brent and WTI crude futures gaining more than 3%. This trend was supported by solid projections for crude and fuel demand, with OPEC maintaining its forecast for relatively strong growth in global oil demand for 2024, while Goldman Sachs doubled down on U.S. fuel demand for the upcoming summer. Additionally, Russia pledged to meet its output obligations under the OPEC+ agreement after exceeding its quota in May.

CURRENCY

The U.S. dollar gained on the Fed's hawkish stance after its recent meeting with an updated forecast of only one interest rate cut this year, pushing out the start of rate cuts to possibly December. This contrasts with other major central banks that have already begun easing, leading to policy divergence that supports the dollar. The Bank of Japan maintained its current bond-buying pace but announced plans to start trimming purchases in the future.
 

DAILY MARKET NEWS – 26-06-2024​

Interest rate projections are tricky, with changing expectations every second. Recently, Federal Reserve Governor Michelle Bowman said interest rates is expected to remain steady "for some time," outright rejecting the notion that there will be rate cuts in 2024, contrary to other members. Bowman warns that lowering rates too quickly could lead to reinflation, and she remains open to further rate hikes instead, if progress on inflation stalls or reverses. Fed officials, like San Francisco Fed President Mary Daly, have also expressed concerns about recent "bumpiness" in inflation data while Federal Reserve Governor Lisa Cook says rate cuts are contingent on economic performance while highlighting the Fed's shift towards considering both inflation and job market conditions in its policy decisions.

EQUITY

US markets closed mixed on Tuesday, with the Nasdaq and S&P 500 gains while the Dow Jones fell, inverse of what happened on Monday. Fed Governors Bowman and Cook emphasised caution regarding interest rate cuts, while economic indicators showed a slight dip in consumer confidence and record home prices in April. Notable corporate news included Carnival's improved earnings outlook and Nvidia's recovery after losing $400 billion in market cap in just 3 days.

GOLD

Gold prices held steady ahead of key inflation data. Fed officials' hawkish comments and rising yields are pressuring gold, countering its hedge appeal. Upcoming GDP and PCE reports could influence rate cut expectations, currently projected for September. Gold saw its price retreat from an all-time high last month but has yet to break the market structure.

OIL

Oil's been on a bit of a pullback phase after a 10% gain since its low in early June. Price may have been waiting for inventory data from EIA to be released today. The Middle East situation is keeping everyone on edge, and we're expecting a busy summer for oil demand. The American Petroleum Institute reported an unexpected rise in U.S. oil inventories, contradicting analyst predictions of a decrease and raising concerns about weaker demand.

CURRENCY

The dollar index remained steady ahead of PCE inflation data that is preferred by the Federal Reserve. Fed officials said they are not rushing to cut interest rates, adding to hawkish risk. Markets are also anticipating the first US presidential debate between Joe Biden and Donald Trump, as well as the upcoming French elections. The Australian dollar strengthened after reporting higher-than-expected inflation data in May, raising rate hike expectations. The yen is trading near intervention level at 160 per dollar, while bitcoin rebounded slightly to $62,000 a pop.
 

DAILY MARKET NEWS – 27-06-2024​

The new home sales data for May 2024 reveals a worrying trend in the housing market. While sales came in slightly below estimates at a seasonally adjusted annual rate of 619,000, the total active inventory of completed new homes ready for sale has surpassed 2019 levels, reaching 99,000 units. This inventory build-up is causing some builders, particularly smaller ones, to be cautious about issuing new permits, leading to a three-month decline in single-family permits. The majority of the new home supply is still under construction or has not yet started, with builders taking a cautious approach to managing their backlog. Economists expect new home sales to remain limited until mortgage rates get cheaper, with a slight rebound expected in the latter half of 2024 if the Federal Reserve begins to cut rates.

EQUITY

U.S. equity indexes closed mostly higher on Wednesday, with the Nasdaq Composite and S&P 500 ticking higher, while the Dow muted. FedEx shares shot up 16%, nearing $300 after earnings, while Moderna's fell 11%, reporting lower vaccine efficacy compared to competition. Major U.S. banks saw their shares slip after the Federal Reserve's annual banking sector stress test results showed reliability to withstand a severe recession and remain above minimum capital requirements despite higher projected losses.

GOLD

Gold prices have been hovering around a two-week low ahead of the PCE price index, and GDP is estimated to gain insights into potential Federal Reserve interest rate cuts moving forward. The strength of the dollar, which is near an eight-week high with the potential to go higher, has made gold expensive to hold. Price is expected to fill imbalance before pushing in either direction.

OIL
Oil prices dip slightly from its highs after U.S. crude oil and gasoline inventories came in much higher than expected. The U.S. Energy Information Administration reported a 3.6 million barrel jump in crude oil stocks and a 2.7 million barrel rise in gasoline stocks, contrary to analysts' expectations of a steady drawdown. However, the market remains in a tug-of-war situation, with potential supply disruptions from Middle East tensions providing some support for prices to close higher than Tuesday.

CURRENCY

The yen hit a 38-year low against the dollar thanks to wide interest rate differentials between the U.S. and Japan. This decline has previously brought about intervention from Japanese authorities, who spent 9.79 trillion yen to support the currency, although there is doubt that they will be able to redo it now that it has reached the same level. Meanwhile, the dollar index remained near an eight-week high, supported by risk in the European election, the Fed's "higher-for-longer" narrative, and the ECB, which has not cut rates even at 2% inflation.
 

DAILY MARKET NEWS – 02-07-2024​

Eurozone inflation eased to 2.5% in June, down from 2.6% in May, attributed to moderation in energy and unprocessed food costs. However, core inflation is above expectations at 2.9%, largely driven by a persistent 4.1% rise in service prices. This stickiness in service inflation has divided ECB policymakers, with some arguing it's a delayed effect that will moderate, while others fear it could keep overall inflation above target for an extended period. The ECB lowered interest rates in early June but made no commitment about future moves, citing a lack of confidence in inflation's trajectory towards the 2% target. ECB's Wunsch left wanting more evidence of inflation moving from 2.5% towards 2% before further cuts, while markets expect about 40 basis points of cuts this year and four cuts in 18 months.

EQUITY

The market started the second half of 2024 rather positively, with technology stocks leading gains and the Nasdaq reaching a new record. Manufacturing data showed mixed results with ISM at contraction in a busy week filled with multiple high-impact news including the jobs report and FOMC minutes. Global stocks edged higher at opening, with European markets responding to French election results, while U.S. Treasury yields rose to their highest levels since mid-June.

GOLD

Gold prices slipped Tuesday as traders eyed the upcoming Fed Chair Powell speech for clues on the interest rate path. The metal struggled in June due to fears of high rates boosting the dollar, which has seen it strengthen to a 2-month high. Other economic data coming out this week include meeting minutes, and Friday's jobs report. Despite recent pressure, increased central bank buying has kept gold's yearly gains intact.

OIL

Oil prices are holding steady near two-month highs, driven by strong summer travel demand in the northern hemisphere. Geopolitical tensions in the Middle East and the threat of Hurricane Beryl to Mexican oil production are adding a risk premium and supply restrictions. OPEC's continued production cuts are set to tighten supplies later this year. Yet, weaker demand in Asia and mixed economic signals are keeping price gains in check, although prices are already up an average 14% for the year.

CURRENCY

Asian currencies weakened as the dollar steadied, with the Japanese yen hitting a 38-year low. Markets await key economic data and Fed comments for interest rate insights. The Australian dollar dipped after RBA minutes but may rise if August brings a rate hike as inflation appears stronger than anticipated. Traders are pricing in a potential September Fed rate cut, a two-rate cut narrative.
 

DAILY MARKET NEWS – 03-07-2024​

Tensions are high in the global bond market as it has been experiencing volatile price movement, with long-term treasuries particularly affected. Over the past year, the BofA 10+ Year U.S. Treasury Index has declined 5.1% on a total-return basis, with even worse performance over longer periods. Experts anticipate further challenges for the bond market, with some predicting the 10-year yield could reach 5% by the end of 2024. The recent presidential debate had also impacted bond market, with yields surging as investors began to price in the possibility of a second Trump presidency, attributing stronger economic growth, higher inflation, and increased Treasury supply under the Trump administration. Similarly, the UK bond market remains cautious, reminiscing about a crisis triggered by aggressive tax-cut plans in 2022.

EQUITY

The S&P 500 reached another record high, closing above 5,500 for the first time. Tesla's stock soared on strong Q2 deliveries, while Paramount Global stock rose on speculation of a bid from billionaire Barry Diller. Asian stocks showed mixed performance, with Japan's Nikkei 225 approaching record highs while Chinese markets declined due to weak service sector activity data. The U.S. job market remains strong while the global markets are waiting for upcoming nonfarm payroll data and Federal Reserve meeting minutes.

GOLD

Recent gold price movements suggest a return to a more normalised market condition, with prices settling into a $2,300-$2,400/oz range after a 15% jump in Q1 from an aggressive central bank's purchase. The correlation between U.S. real rates and gold prices is becoming prominent again, with gold prices typically rising when rates fall and vice versa. However, the current net-long position being built by U.S. CFTC 'non-commercials' indicates that short-term price risk may still be to the upside.

OIL
Oil prices edged higher with support from lower U.S. crude stockpiles, although they closed lower after pressure from profit-taking and concerns over Hurricane Beryl's impact on Gulf production outweighed demand boosts. Meanwhile, OPEC's oil output rose in June for the second consecutive month, primarily due to increased supply from Nigeria and Iran, offsetting voluntary cuts by other members of the OPEC+ alliance.

CURRENCY

The U.S. dollar retreated in the early London session following Fed Chair Powell's hawkish comments and higher job openings. The euro edged higher, supported by data showing persistently high inflation in the eurozone's services sector. Meanwhile, the British pound remained steady ahead of the UK general election, with the opposition Labour Party expected to return to power. Markets are now pricing in expectations of interest rate cuts by 45 basis points by year-end.
 

DAILY MARKET NEWS – 04-07-2024​

Nancy Pelosi's husband just made a big bet on AI, buying millions in Broadcom options and Nvidia stock while dumping Tesla and Visa shares, although he missed the recent rally. This moves towards AI fits with market trends but has reiterated debate about whether politicians should trade stocks at all. Given Pelosi's prominence and past performance, people are watching her finances closely, with one X’s user reportedly making 71% ytd just by copying her trade. The whole situation has even inspired ETFs that copy congressional trades, showing just how much attention these political stock moves get. It's a reminder of the tricky mix of politics and personal investing that keeps making headlines.

EQUITY

The S&P 500 and Nasdaq reached record highs after a record close in a relentless rally as the VIX is barely reacting. Softening labour market conditions and contracting service PMI support dovish narrative, with the September rate cut expectation to over 70%. Japanese markets were particularly strong, with the Nikkei 225 and TOPIX approaching record highs, tracking Wall Street gains.

GOLD

Gold prices basically touched $2,365 per ounce before reversing, approaching a four-week high. This rally was driven by fresh US economic data that strengthened interest rate cuts as the dollar pushed lower. Key factors included a sharp contraction in US services activity, slower private payroll growth, and rising ongoing jobless claims. Short term outlooks are negative as prices reach the upper bound of the consolidation phase.

OIL

Oil prices fell from late New York into the Asian session after U.S. employment and business data came in below expectations. However, these weaker economic data could support arguments for the Federal Reserve to cut interest rates, which might boost oil demand in the long term. The EIA reported a significant stock drawdown of 12.157 million barrels in oil stockpiles, far exceeding projections. Russia's oil revenues for June rose nearly 50% compared to the previous year, raising the risk of a supply glut as sanctioned oil leaks into the main market.

CURRENCY

The dollar slipped on Thursday, pointing towards slowing growth and increasing expectations of a rate cut in September. The euro and sterling consolidated off three-week highs against the greenback, with some analysts suggesting that a Labour Party victory could create a more favourable economic environment. Traders are now focusing on Friday's U.S. nonfarm payrolls report for insights into the labour market.
 
Federal Reserve Chair Jerome Powell delivered his semi-annual testimony to Congress, providing insights into the central bank's monetary policy outlook. Powell indicated that the labour market has cooled considerably and appears to be back in balance, stating that the U.S. is no longer an overheated economy. He emphasised the importance of achieving price stability and reiterated the need for more good inflation data before considering policy changes. Powell noted that the Fed now faces two-sided risks, acknowledging that easing policy too soon could harm inflation progress, while easing too late could disproportionately weaken economic activity. He stressed the Fed's commitment to data-based decision-making and maintaining independence in rate-setting.

EQUITY

Goldman Sachs Group and Intercontinental Exchange ended at all-time highs, with several other banks and finance companies in the S&P 500 closing at their highest prices in at least a year. Major banks like JPMorgan, Citigroup, and Bank of America are scheduled to report their spring-quarter earnings on Friday. Analysts expect S&P 500 companies to report an average of 10.1% growth in aggregate earnings per share for the second quarter, up from 8.2% in the first quarter.

GOLD

Gold prices are potentially running for a medium-term bullish uptrend based on price and the U.S. 10-year Treasury real yield. A lower Treasury real yield is expected, suggesting a lower opportunity cost for holding gold. Currently, gold is trading in a narrow range in the Asian session ahead of U.S. inflation data. Meanwhile, globally physically backed gold exchange-traded funds have seen consecutive months of inflows, particularly in Europe and Asia, which are currently described as excessive buying at a price above normal trading range.

OIL
Oil prices fell after Hurricane Beryl's extensive power outages in Texas, affecting over 1.8 million accounts. Brent and WTI crude futures dropped, continuing recent downward trends as the summer travel season has ended as well. U.S. oil inventories showed a larger-than-expected draw, indicating steady fuel demand while traders now focused on upcoming Chinese economic data for demand insights.

CURRENCY

The dollar closed higher on Tuesday after Fed Chair Powell's testimony, which offered no clear signals on rate cuts while staying hawkish. The New Zealand dollar fell sharply after the RBNZ's dovish stance, while the Japanese yen and Chinese yuan struggled with mixed inflation data. Traders still expect a September rate cut, but Thursday's US CPI data is now in focus.
 

DAILY MARKET NEWS – 12-07-2024​

The latest inflation data came in lower than expected, reinforcing dovish messaging from Powell and supporting the idea that the Fed's tighter policy stance is effectively lowering consumer price inflation. Traders have responded by pricing in a high probability of a September rate cut, currently at 86%, with increasing odds of additional cuts by year-end. The slowing cost of shelter is seen as a notable development, even with higher energy costs compared to last month. As the Fed approaches its July 30-31 meeting, attention will focus on potential changes to the policy statement and whether officials will continue to refer to inflation as "elevated."

EQUITY

Japanese markets took a hit on Friday, particularly in tech-heavy indexes, mirroring Wall Street's magnificent seven's decline even with positive U.S. inflation data. South Korea also saw substantial losses in tech stocks and chipmakers, while Hong Kong jumped, possibly due to bargain hunting. Australia's ASX 200 reached a record high as investors shifted to sectors likely to benefit from lower interest rates.

GOLD

Gold prices dipped slightly on Friday after lower CPI data pushed prices above $2,400 an ounce. The Consumer Price Index came in at -0.1% while consensus was at 0.1%, solidifying the projection for a rate cut in September. This prospect sent gold surging past $2,400 per ounce, as lower interest rates typically make non-yielding assets like gold more attractive. The dollar and Treasury yields fell in response, further benefiting precious metals.

OIL

Oil prices jumped on Friday's London session, with Brent crude surpassing $86 per barrel. The drop in U.S. consumer prices generated hopes for rate cuts and a boost to economic growth. U.S. gasoline demand hit a four-year high for Independence Day week, while Gulf Coast refiners ramped up crude oil processing to levels not seen since 2019. The IEA predicts slowing growth, citing reduced Chinese consumption, while OPEC maintains a more optimistic forecast, contradicting perspectives on the global transition to cleaner fuels.

CURRENCY

The U.S. dollar stabilised on Friday after hitting one-month lows, with June's consumer price index showing lower annual growth at 3%, down from May's 3.3%. The euro and the pound have also pricked higher, while the Japanese yen saw higher volatility, dropping sharply from near 38-year highs around 162 to about 159, probably due to government intervention. Despite weak German wholesale price data, the euro held steady, and the pound remained flat after nearing a one-year high against the dollar.
 
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