Australia has seen a decline in inflationary pressures. Japan may conduct currency intervention shortly :: InvestMacro

By JustMarkets

As of Tuesday’s stock market close, the Dow Jones Index (US30) decreased by 0.08%. The S&P 500 Index (US500) was down 0.28%. The NASDAQ Technology Index (US100) closed negative 0.42%.

On Tuesday, stock indices gave up early gains and suffered moderate losses. Nvidia (NVDA) fell more than 2%, causing chip maker stocks to fall, which impacted the overall market. Eight of the eleven sectors ended trading lower. The US economic news on Tuesday was mixed for stocks, with new capital goods orders rising more than expected in February, but the US consumer confidence index unexpectedly declined.

Tesla (TSLA) closed higher by more than 2% after it was revealed that Italy’s Ministry of Industry has contacted the company about the potential production of electric trucks.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.67% and set a new all-time high, France’s CAC 40 (FR40) closed Tuesday up 0.41%, Spain’s IBEX 35 (ES35) rose by 0.36%, and the UK’s FTSE 100 (UK100) closed positive 0.17%.

The GfK Consumer Confidence Index for April in Germany rose by 1.4 to 27.4, stronger than expectations of 28.0. ECB Governing Council spokesman Müller said the data over the coming weeks may be enough to confirm a slowdown in inflation by the time ECB policymakers set borrowing costs in June.

The Swiss franc fell to 0.9 per US dollar in late March, the lowest in nearly five months, amid contrasting monetary policies from the Swiss National Bank and the Federal Reserve. The SNB cut its benchmark interest rate by 25 bps to 1.5% at its March meeting, surprising markets that had expected it to hold, the first rate cut among major central banks since global disinflation began in 2023. In addition to the rate cut, the SNB sharply revised its inflation forecast for Switzerland downward, with policymakers expecting inflation to stay below 1.5% in the near term despite the government ending utility subsidies.

Sweden’s Riksbank will hold a monetary policy meeting today. The Riksbank is expected to leave rates unchanged at this meeting, but traders will be hoping for hints that a rate cut will come in June or even earlier.

WTI crude prices fell to $81 a barrel on Wednesday, extending losses from the previous session. A large increase in US crude inventories raised demand concerns in the world’s top oil consumer. Industry data showed that US crude inventories rose by 9.337 million barrels last week, a reversal from the previous week’s 1.519 million barrel decline and the biggest weekly increase since February last year.

Asian markets were mostly down. Japan’s Nikkei 225 (JP225) lost 0.40%, China’s FTSE China A50 (CHA50) jumped 0.69%, Hong Kong’s Hang Seng (HK50) ended yesterday up 0.88% and Australia’s ASX 200 (AU200) was negative 0.41%.

Softer-than-expected Australian inflation data bolstered bets that the Reserve Bank of Australia (RBA) may start cutting interest rates this summer. The data showed that Australia’s monthly consumer price index for February 2024 came in at 3.4%, unchanged from the previous two months and missing forecasts for a slight rise to 3.5%.

The Japanese yen’s gradual decline toward 152 per dollar for the first time since 1990 was enough for Japan’s finance minister to immediately warn of “decisive steps” to tame “disorderly” moves. He last uttered those words before the central bank intervened at the end of 2022 to support the yen. Meanwhile, Bank of Japan Governor Kazuo Ueda said Wednesday that supporting the economy with an accommodative monetary policy is now essential.

S&P 500 (US500) 5,203.58 −14.61 (−0.28%)

Dow Jones (US30) 39,282.33 −31.31 (−0.08%)

DAX (DE40) 18,384.35 +123.04 (+0.67%)

FTSE 100 (UK100) 7,930.96 +13.39 (+0.17%)

USD Index 104.30 +0.07 (+0.07%)

Important events today:

• – Australia Consumer Price Index (m/m) at 02:30 (GMT+2);
• – US Crude Oil Reserves (w/w) at 16:30 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.