Asian Daily Market Review

Asian markets ended Thursday mixed as investors digested the possibility of delays to interest rate cuts in the U.S. after a Fed official floated the idea on Wednesday. Japan’s Nikkei was the biggest loser in the region, with the Yen remaining near a 34-year low amid speculation that the Bank of Japan is preparing for stimulus to prop up the languishing currency. Meanwhile Australia’s major index hit a record high, helped by gains from the mining sector.

Japan’s Nikkei ended the session 1.5% lower, underperforming the entire Asian region. Shares of Softbank Group fell by 0.7%, while Sony shares finished 1.8% lower. Among the major exporters Toyota lost 1.2%, Panasonic shares slipped 0.5% lower, and Canon edged lower by 0.2%.

In Australia the S&P/ASX 200 rallied to a new record high, adding 1% for the day. The gains for the broader market came despite a mixed performance for the big four banks, where ANZ gained 0.5%, Commonwealth Bank advanced by 0.3%, Westpac tacked on 0.4%, but NAB slipped slightly lower by 0.1%. The major miners had a good day, supporting the broader market with a 1.4% gain from BHP and a 0.7% move higher in Rio Tinto.

Mainland Chinese markets recovered from their losses of the prior session, with the benchmark Shanghai Composite rising by 0.6% and the smaller cap Shenzhen Composite adding 1.3%. Over in Hong Kong the Hang Seng followed the mainland higher, gaining 0.9% on the day.

In South Korea the Kospi slipped 0.3% lower, and in Taiwan the Taiex did the same, ending the day with a 0.3% loss.

Southeast Asian markets were also weaker on the day, with Singapore’s Straits Times Index declining by 0.9% while the KLCI in Malaysia fell by 0.5%.

Oil Prices Rallied

Oil prices are into solid positions, following two consecutive days of losses.

Crude Oil Daily Chart

This is the case as markets predict more limited supply levels.OPEC+ producer alliance are very expected to preserve the present production reduction levels.

Now, oil trades at $82.56, which is a gain of $0.91 or 1.12% from the previous close of $81.65.

The daily trading range is from $81.54 to 82.63.

In the prior session, oil prices were pressured following last week’s unexpected surge U.S. crude oil accompanied with falling demand, as reported by the Energy Information Administration.

However, the crude stock increase was smaller than the build projected by the American Petroleum Institute, and analysts pointed out that the increase was lower than what would be expected for this time of year.

Moreover, a boost to U.S. refinery served the utilisation rates, which soared 0.9 % points last week.

In fact, OPEC+ is not very expected to make any oil output policy changes until its next meeting in June.

Will The Bank Of Japan Intervene With The Yen?

Talk of intervention by the Bank of Japan is heating up as the Yen remains near a 34-year low against the U.S. dollar. The Yen reached a level of 151.97 against the U.S. dollar on Wednesday, something not seen for the currency pair since 1990. After hitting that level the Yen pared some of its losses, but remains at the 151.38 level late Thursday in New York.

Even during the Asian currency crisis of 1997 the Yen didn’t reach such levels, although it was recently as low as 151.95 in October 2023.

The continued weakness in the Yen, even as Japan’s central bank has abandoned negative interest rates for the first time in 17 years, and expectations for U.S. interest rate cuts increase, is driving the speculation for the BoJ to intervene in currency markets and prop up the Yen. Recently Japan’s finance minister Shunichi Suzuki indicated that measures to “respond to disorderly FX moves” were not off the table.

On Wednesday Masato Kanda , the vice finance minister for international affairs said that the moves in the Yen are being closely and urgently monitored by Japanese policymakers. He noted that recent moves in the Yen, which have been as large as 4% in two weeks, have been seen as excessively volatile. BoJ members have also spoken against the recent volatility, saying that if currency fluctuations begin impacting the economy the BoJ would react with monetary policy changes.

While many global analysts admit that intervention is the likely course for the Yen in the short-term, they also point out that it isn’t a long-term solution. They also point out that there are some upsides to the weaker Yen such as increased tourism and a stronger stock market.

Gold Surpasses $2,200 Level

At the close, spot gold was up 0.5% at $2,189.89 per ounce. U.S. gold futures settled 0.6% higher at $2,212.7.

Gold prices leapt above the $2,200 level on Wednesday as investors prepare themselves for upcoming inflation data that is hoped to provide further signs that the Federal Reserve can move ahead with interest rate cuts in the coming months.

This Friday will see the release of the U.S. Core Personal Consumption Expenditures Price Index (CPE), which is the Fed’s favorite measure of inflation. In January the index rose by 0.3% on a monthly basis and 2.4% on a year-by-year basis. Expectations for the February reading are for a slight increase to 0.4% for monthly PCE and 2.5% for the year-over-year reading. Annual Core PCE inflation is expected to hold steady at 2.8%.

While that’s still above the Fed’s 2% inflation target it maintains the positive trend and if PCE is as expected, or even lower than expectations, investor hopes for rate cuts will be reinforced. Current expectations for a June rate cut are 70% according to the CME FedWatch tool.

Gold hit a record high last week following dovish commentary from the Fed, and a lower than expected PCE reading could spark a rally to a new record high. Lower interest rates are bullish for gold as they reduce the opportunity cost of holding yieldless gold.

And while investment demand for gold has been dented by higher rates, global central banks have continued to feed their appetite for the safe haven asset. Higher gold prices do have a downside though as they reduce retail investors demand for the precious metal.

In other precious metals silver was up 0.6% at $24.56 per ounce, platinum lost 0.9% to $894.85 and palladium fell 0.7% to $986.31.

European Daily Market Review

European stocks are without a clear market direction today as market momentum wanes.

The regional Stoxx-600 lost 0.04% at 9:50 a.m. in London, with retail stocks rallied 1.65% as travel stocks fell 0.65%.

The German DAX secured 64.45 or 0.35% from 18,448. The French CAC-40 gained 8.77 or 0.11% from 8193.FTSE-100 slipped 22.29 or 0.28% from 7,908.

Swedish retailer H&M rallied 12% after largely coming off predictions for its fiscal first quarter operating profit.

The Spanish inflation data, which came in at 3.2% for March, and French consumer confidence figures, which showed a cautious a rising sentiment.

H&M shares were on track to surge at their sharpest rate since June 2023 on Wednesday after the Swedish retailer announced greater than predicted first quarter numbers.

The Swedish krona was slightly less versus the common currency and the USD U after the Riksbank held its key interest rate at 4.

U.S. Daily Market Review

The S&P-500 jumped today following a weaker session.The Dow Jones Industrial Average gained 254 points, or 0.6%.

The Nasdaq Composite fell 0.1%.Shares of Coinbase tumbled around 2% this morning after a judge ruled the Securities and Exchange Commission has pleaded that the crypto services company operates as an exchange under federal securities law.

Trump Media & Technology Group (DJT) rallied a whole 14% today in its second day of trading on the Nasdaq.

In fact, the parent company of Donald Trump’s social media platform Truth Social surged 16% in its first official trading day on Tuesday.

GameStop shares retreated around 14% after the video retailer announced a large loss in fourth-quarter revenue from the year-ago period.

Moreover, in its fourth quarter, the company posted revenue of $1.79 billion, less than the $2.23 billion it reported in the same quarter the previous year.

Merck shares added around 4% in the premarket after the Food and Drug Administration approved yesterday  the use of Winrevair, a drug aimed at treating adults patients.