Market Update – Risk-on Mood due to stimulus measures; Commodities climb

Asia & European Sessions:

• More new highs were set on Wall Street today as the Fed’s jumbo rate cut continues to reverberate. Fedspeakers indicated more cuts are in the future.
• European stocks are poised for a positive open, following a rally in Asian markets driven by China’s latest economic stimulus efforts aimed at stabilizing its stock market.
• China’s plan to inject 800 billion yuan ($114 billion) in liquidity support for its stock market alongside measures allowing brokerages to access central bank funds to buy equities, boosted investors’ confidence. These moves are part of a broader stimulus package that includes cuts to short-term interest rates and reduced borrowing costs on up to $5.3 trillion in mortgages.
• While the market responded positively to these policies, analysts warn that the rally could be short-lived, as underlying issues like deflation remain unresolved.
• The RBA held its cash rate at 4.35% for the 7th consecutive meeting, while leaving future policy options open.
• Euro Stoxx 50 futures rose 0.5%, as the MSCI Asia Pacific Index marked its fourth consecutive daily gain. Hong Kong stocks surged over 4%.
• US Stock market remains positive, with the S&P rallying another 0.28% to 5719 while the Dow was up 0.15% to 42,125. This is the 40th new record this year on the former and the 30th for the latter. The NASDAQ rose 0.14% to 17,974.

Financial Markets Performance:

• The USDIndex was up slightly to 100.898, but failed to hold the test of 101.229.
• Gold managed another fresh peak too, rising 0.18% to $2640 per ounce, supported by rising geopolitical risks, central bank buying, and expectations for further declines in interest rates.
• USOil prices recovered yesterday’s losses amid rising tensions in the Middle East after Israeli airstrikes in Lebanon.
• Μost Asian currencies strengthened against the US Dollar, with the Aussie rising against US dollar, i.e. AUDUSD falling to 0.6820, and the yield on 3-year bonds fluctuated.
• USDJPY retests 144.70 (top of falling triangle).

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Andria Pichidi

Market Analyst

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