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Global equity/currency market update: Asian Stocks Drift Lower as Investors Await Fed Minutes

21 May 2024 8:50 am
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Mumbai, 21 May (Commoditiescontrol): Asian stocks edged lower on Tuesday while the dollar remained firm as investors awaited the release of minutes from the Federal Reserve's latest policy meeting. These minutes are expected to provide insights into the timing and extent of potential interest rate cuts this year.

Japan's tech-heavy Nikkei index bucked the trend, rising 0.2% thanks to gains in chip shares following the Nasdaq's record high overnight. This increase was ahead of Nvidia's earnings report due on Wednesday.

Gold moved back towards its all-time peak reached on Monday, while crude oil prices eased due to concerns that U.S. interest rates might remain high for longer. This cautious outlook from Fed officials came despite recent data indicating a slowdown in inflation.

In the cryptocurrency market, ether and bitcoin reached new six-week highs amid speculation that the U.S. Securities and Exchange Commission (SEC) might approve a spot ether exchange-traded fund (ETF).

Markets are currently pricing in approximately 41 basis points of Federal Reserve rate cuts for this year, with a quarter-point reduction fully expected by November. Traders have been adjusting their expectations following data earlier this month showing consumer price pressures eased in April, breaking a trend of inflationary surprises from the start of the year.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.6%, impacted by the Hang Seng's more than 1% decline from Monday's multi-month peak. Conversely, Japan's Nikkei index added to the previous day's 0.73% rally, reflecting optimism in the tech sector.

Nasdaq futures dipped 0.1% after the cash index rose 0.65% to close at an all-time high. S&P 500 futures remained flat following Monday's 0.1% gain.

Gold eased 0.2% to around $2,420 per ounce, after nearing $2,450 for the first time overnight. The dollar firmed slightly, with the dollar index up 0.1% to 104.69 after a similar increase on Monday.

The 10-year Treasury yield was stable at 4.4453%, following a 1.7 basis point rise on Monday. Brent crude futures fell 12 cents to $83.34 a barrel, while U.S. West Texas Intermediate crude (WTI) decreased 8 cents to $79.72 a barrel.

Cryptocurrencies continued to perform well, buoyed by reports that the SEC had requested exchanges to update regulatory filings for ether ETFs, suggesting potential approval this week. Bitcoin reached $71,957, and ether jumped to $3,720.80, both hitting levels not seen since April 9.

Analysts at Sycamore anticipate bitcoin could retest its all-time high of $73,803.25 in the coming days, with potential to push towards $80,000.

(By Commoditiescontrol Bureau: 09820130172)

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