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Asia Morning: US soft landing hopes lift EM assets 19 Aug

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August 19, 2024

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Index	Last	Change	% Change
trading higher Dow Jones Industrial Average .DJI	40,659.76	+96.70	0.24%Positive
trading higher Nasdaq Composite Index .IXIC	17,631.72	+37.22	0.21%Positive
trading higher S&P 500 Index .SPX	5,554.25	+11.03	0.20%Positive

Index	Last	Change	% Change
unchanged Nikkei Index .N225	38,062.67	—	—
trading higher Hang Seng Index .HSI	17,430.16	+321.02	1.88%Positive

Source: LSEG, opens new tab – data delayed by at least 15 minutes

The trading week gets underway in Asia on Monday, with investors in pretty good spirits following last week’s rebound in risk appetite as the fabled U.S. ‘soft landing’ comes back into view, a scenario that should bode well for Asian and emerging markets.

Emerging

market equities posted their biggest weekly rise since April and world stocks their best week since October. The Nasdaq and S&P also had their best week since October, and the VIX ‘fear index’ of Wall Street volatility is back below 15.0.

Even Chinese stocks snapped a three-week losing streak to rebound from a six-month low. Although the bounce was a slender 0.4%, it is a move in the right direction as far as China bulls – and policymakers – are concerned.

But China’s economic numbers remain weak and continue to undershoot even economists’ increasingly gloomy expectations. China’s economic surprises index, which has been negative since June, last week fell to its lowest in almost a year.

Today’s Market News

Here are key developments that could provide more direction to markets on Monday:

Japan machinery orders (June)
Malaysia trade (July)
Thailand GDP (Q2))

Fixed income

U.S. Treasury yields eased on Friday, partly reversing the previous day’s big gains as investors digested data showing a resilient U.S. consumer and inflation trending lower.

U.S. 10-year note US10YT=RR fell 3.6 bps from late Thursday to 3.89%, paring Thursday’s gain that was the biggest in a week.

Forex

The dollar fell against the yen on Friday, and was softer against other peers as traders took profits and investors sifted through economic data to gauge the Federal Reserve’s appetite for interest-rate cuts.

The dollar index =USD, which measures the greenback against six other major currencies, fell 0.48% to 102.54

Commodities

Tensions in the Middle East bolstered demand for bullion. Spot gold XAU= was up 1.7% to $2,498.72 per ounce by 02:27 p.m. EDT (1827 GMT), after hitting a record high of $2,500.99 earlier.

Oil prices settled down nearly 2% on Friday, little changed on the week with Brent crude below $80, as investors tempered expectations of demand growth from top oil importer China.

Brent crude futures fell $1.36, or 1.7%, to settle at $79.68 per barrel.

December 4, 2024

Featured AuthorInvest 101