Market Watch APAC – 31st May 2024
The US-dollar unraveled some of its recent gains, as US Treasury yields wound back on downward revisions to Annualised GDP Q1 reports and comments out of the Fed, that saw positioning on the tail of month-end flows. Analysts initial reaction is to consider the Fed will be more likely to cut rates in a cooling economy as the evidence begins to add up for them, but it will be the core PCE release tonight that is the central bank’s preferred inflation measure. The AUDUSD has responded with gains back to the daily resistance at 0.6650 and marched in tune to the gains from Chinese Renminbi versus the dollar. For the Asia session again today, any strength will look to regain the 0.6650/60 zone and any decline will look for initial support at 0.6600/10’s. Tonight’s release of the US April PCE and how it relates to Fed policy will be closely watched by traders.
Wall Street stocks were lower today but did manage to recover some after the US growth data release. The DJI fell -0.9%, while the S&P500 lost -0.6% and the Nasdaq declined -1.1% for the day. Australian shares should open higher today after the US growth data raised hopes that the Fed will have reason to cut the Funds rate at least once before the year is out.
Gold prices managed to finish the day in the black, thanks to softer Treasury yields and US-dollar following the latest data drop for growth, raising hopes that the Fed will cut rates by the end of the year, at least once.
Copper prices on the LME declined, with noted spec positions starting to unwind on fears of declining demand if interest rates remain high and affect base metals demand. Dalian Iron Ore prices fell for the day with traders continuing to re-assess demand for steel in China, as authorities reiterate their position to monitor steel output.
Brent Crude prices slipped lower again today, as US reports a weekly fall in fuel demand and gasoline and distillate inventories rising.
| AUDUSD
Open today 0.6633 Yesterday’s Range 0.6590 / 0.6647 |
NZDUSD
Open today 0.6115 Yesterday’s Range 0.6089 / 0.6131 |
AUDNZD
Yesterday’s Range 1.0807 / 1.0851 |
| AUDEUR
Yesterday’s Range 0.6110 / 0.6130 |
AUDCNH
Yesterday’s Range 4.7904 / 4.8213 |
AUDGBP
Yesterday’s Range 0.5197 / 0.5218 |
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