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Global equity/currency market update: Asian Markets Gain as Dollar Softens Ahead of U.S. Inflation Data

15 May 2024 9:00 am
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Mumbai, 15 May (Commoditiescontrol): Asian stock markets edged higher on Wednesday, with investor sentiment bolstered by expectations surrounding the U.S. consumer price index (CPI) report due later in the day. The anticipation surrounding this data release is shaping expectations for future U.S. Federal Reserve monetary policy actions.

The MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.38%, reaching a 15-month high at one point during the session. Meanwhile, Japan’s Nikkei 225 saw a 0.58% rise, reflecting a broadly positive mood in regional equities.

Overnight, the U.S. reported a higher-than-anticipated rise in April producer prices, hinting that inflation pressures remained pronounced in the early second quarter. However, Federal Reserve Chair Jerome Powell described the data as "mixed" at a banking event in Amsterdam, noting downward revisions to prior figures. This commentary helped moderate investor concerns, leading to a rally in U.S. stocks on Tuesday, with the Nasdaq reaching a record closing high.

Investors are now recalibrating their expectations for U.S. interest rate movements. Early in the year, markets anticipated as much as 150 basis points of rate cuts; however, ongoing inflation concerns have reduced these expectations to just 43 basis points of easing within the year.

In the equities market, stocks like GameStop and AMC witnessed notable gains, fueled by online chatter and posts from influential social media personalities like Keith Gill, known as "Roaring Kitty," who was pivotal in the 2021 meme stock surge.

Chinese stocks, however, faced slight declines in early trading. The Shanghai Composite index dipped by 0.16%, and Hong Kong's Hang Seng Index decreased by 0.22%, amid new U.S. tariff hikes on several Chinese imports, including electric vehicles and computer chips.

Currency markets saw the dollar weaken, with the dollar index dropping to 105.01. The euro neared a one-month high, trading at $1.0817, while the Japanese yen was at 156.36 against the dollar, close to its two-week low.

In commodities, oil prices increased modestly due to wildfires near Canada’s oil sands and anticipated declines in U.S. crude and gasoline stockpiles. U.S. crude was up by 0.4% at $82.71 per barrel, and Brent crude rose 0.5% to $78.39 per barrel. Gold remained relatively stable at $2,356.79 per ounce.

Investors across all markets remain vigilant, with the upcoming U.S. CPI report poised to potentially shift Federal Reserve policy expectations and impact global financial markets.

(By Commoditiescontrol Bureau: 09820130172)

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