25/09/2024 Daily Reports
The People’s Bank of China followed up Tuesday’s rate cuts with another reduction on Wednesday, as traders increasingly bet on another major rate cut from the U.S. Federal Reserve in November.
Fed Governor Adriana Kugler is set to speak on the economic outlook later today, continuing a week of significant Fed commentary, including Chair Jay Powell’s remarks scheduled for Thursday.
In Europe, ECB’s Elizabeth McCaul and Bank of England’s Megan Greene are both set to speak today, focusing on consumption trends. Sweden’s Riksbank is also expected to announce a 25-basis point rate cut, with economists predicting two more cuts by the end of 2024. Riksbank Governor Erik Thedeen has even suggested that a half-point cut remains a possibility.
Key market-moving events to watch on Wednesday include:
– The Riksbank’s policy decision
– ECB and BoE speeches
– France’s consumer confidence and unemployment data
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Asian Markets Surge on China’s Stimulus Hopes as Yuan Strengthens and Global Commodities Rally
Asian shares rallied for the second consecutive day, driven by optimism surrounding China’s comprehensive stimulus package aimed at reviving its slowing economy.
The CSI 300 Index surged over 3%, with Chinese stocks on track to recover from year-to-date losses.
The offshore yuan strengthened beyond 7 per US dollar for the first time since May 2023, and emerging market currencies, including the Malaysian ringgit and Thai baht, saw gains.
China’s measures included interest rate cuts, cash infusions for banks, and incentives for homebuyers, boosting investor sentiment across Asia.
However, analysts at Morgan Stanley and Mizuho Bank remain cautious about whether these policies will be sufficient to tackle deeper economic challenges, including deflation and weak consumption.
Meanwhile, US futures dipped, signaling limited enthusiasm in Western markets, while commodities like iron ore and gold surged, with gold reaching a record high of $2,662 an ounce.
Investors are now looking for further fiscal support from China and awaiting key US economic data later this week, which could impact future Federal Reserve rate cuts.
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