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World News Round up

South Korea Export Prices Rise the Most Since 2022

South Korea's export prices jumped by 6.2% from a year earlier in April 2024, following a downwardly revised 2.3% rise in the previous month. It was the biggest rise in export cost since November 2022, and pointed to the fourth consecutive month of rise in export prices driven by higher cost for manufacturing products (6.3% vs. 2.3% in March). Conversely, prices declined at a faster pace for agricultural, forestry, and marine products (-6.8% vs. -4.9% in March). On a monthly basis, export prices rose by 4.1% in April 2024, following a downwardly revised 0.3% increase in the previous month.

South Korea Import Prices Rebound in April

Import Prices in South Korea went up by 2.9% year-on-year in April 2024, following a downwardly revised 0.5% fall in the prior month, snapping two straight months of decline in cost of purchases. Prices rebounded for intermediate goods (2.9% vs. -1.2% YoY in March) and raw materials (3.6% vs. -0.7%). Meanwhile, prices increased at a faster pace for capital goods ( 1.4% vs 0.7%) and consumer goods ( 2.8% vs 1.7%). On a monthly basis, import prices jumped by 3.9%, rising for a fourth straight month after an upwardly revised 0.5% increase in a month earlier.

FX Updates: Polish Zloty Increases by 0.58%

Top currency gainers are Polish Zloty (0.58%), Turkish Lira (0.48%) and South Korean Won (0.45%). Biggest losers are Japanese Yen (-0.28%). In addition, there was a slight change on British Pound (0.27%), Euro (0.17%) and Dollar Index (-0.08%).

Energy Commodities Updates: Natural gas Rallies by 5.20%

Top commodity gainers are Natural gas (5.20%), Crude Oil WTI (1.13%) and Ethanol (0.96%). Biggest losers are Natural Gas UK GBP (-1.09%) and Natural Gas EU Dutch TTF (-0.64%). In addition, there was a slight change on Brent Crude Oil (0.8%).

Metals Commodities Updates: Copper Gains by 2.46%

Top commodity gainers are Copper (2.46%) and Platinum (0.54%). Biggest losers are Gold (-0.93%).

Agricultural Commodities Updates: Cocoa Slumps by 11.29%

Top commodity losers are Cocoa (-11.29%), Cheese (-8.88%) and Rice (-3.36%). Gains are led by Wheat (3.50%) and Oat (3.49%).

New Zealand Tourist Arrivals Increase 27.9% YoY in March

The number of visitor arrivals in New Zealand rose by 27.9% from a year earlier to 340,306 in March 2024. The biggest changes were in arrivals from: China (up 177,000 to 211,000);Australia (up 167,000 to 1.29 million); United States (up 149,000 to 376,000); India (up 51,000 to 88,000); Korea (up 41,000 to 70,000) and Japan (up 34,000 to 60,000). Still, the March 2024 number of overseas visitor arrivals was 90% of the pre-COVID-19 number of 378,300 in March 2019. March 2024 visitor numbers were likely boosted by the timing of the Easter holiday, which was in late March in 2024 and in early April in 2023. Of the 340,300 overseas visitor arrivals in March 2024: 39% were from Australia (compared with 36% in March 2019), 16% were from the United States (13% in March 2019); 6% were from the United Kingdom (6% in March 2019) and 5% were from China (11% in March 2019).

Shares in New Zealand Extend Losses

The stock market in New Zealand fell 20.8 points or 0.2% to 11,631.3 in early trade on Tuesday, treating for the second straight session while hitting its lowest level since December 21, as traders cautious ahead of US inflation figures and awaited a slew of Chinese economic data later this week. Caution also built after the US consumer expectations for the year ahead rose to a five-month high of 3.3% in April from 3% in the prior four months. Domestically, the survey commissioned by the RBNZ showed that the inflation rate to ease to 2.73% from 3.2% in the next 12 months, the lowest since September 2021. Nevertheless, the central bank is likely to hold its official cash rate at 5.5% for the 7th straight meeting next week to bring inflation back to a target of 1 to 3%. Energy stocks, consumer staples, and tech dragged the index, with losses from Meridian Energy (-0.9), Freigthways Group (-0.6%), Westpac Bank Corp (-0.4%), and Manawa Energy (-0.4%).

Japanese Shares Rise After PPI Data

The Nikkei 225 Index rose 0.4% to above 38,300 while the broader Topix Index gained 0.5% to 2,737 on Tuesday, erasing losses from the previous session as investors reacted to Japan’s latest producer inflation report. Data showed that corporate inflation in the country was steady in April compared with a year earlier, but import prices jumped due to the yen’s weakness. Meanwhile, investors remained cautious ahead of key US inflation readings this week that could influence the interest rate outlook globally. Notable gains were seen from index heavyweights such as Toyota Motor (1.2%), Nintendo (3.7%), Daikin Industries (1.9%), Advantest (4%) and Mitsubishi Heavy Industries (2.1%). In corporate news, SoftBank Group jumped 2% after its flagship Vision Fund posted a $4.6 billion gain for the fiscal year ended in March as major investments rallied.

Gold Steady, Eyes on US Inflation Data

Gold prices held steady near $2,340 per ounce on Tuesday, as investors shifted their attention to the upcoming US inflation reports this week, seeking additional insights into the Federal Reserve's monetary policy path amid mixed cues from Fed officials. The PPI is set to be released later on the day, with the CPI following on Wednesday. Following a less robust US payrolls report for April and a weak jobs report last week, expectations for rate cuts this year have grown. The market anticipates that the Fed will likely cut rates twice this year and will begin its easing in September. Elsewhere, the share of gold in India's foreign reserves increased to 8.15% at the end of March, according to the country's central bank. Meanwhile, the worsening geopolitical conflict in the Middle East continues to boost the safe haven’s appeal. Reports showed that Israeli forces advanced deep into the northern edge of Gaza to recapture an area from Hamas fighters.

South Korean Shares Flat Ahead of US Inflation Report

The benchmark KOSPI was nearly flat to around 2,729 points in early trade on Tuesday, as investors sat on the sidelines ahead of the key US inflation report due this week. Traders are closely monitoring the upcoming US CPI data for April, set to be released on Wednesday, to seek insights into the future direction of the Federal Reserve's monetary policy, which could impact the global interest rate outlook. In economic news, South Korea's export prices jumped by 6.2% year-on-year in April, the largest rise in export cost since November 2022. Meanwhile, the country’s import prices rose by 2.9%, snapping two straight months of decline in cost of purchases. Across the board, stocks traded mixed, with gains seen from SK Hynix (0.3%), LG Energy Solution (1.1%), and Samsung Biologics (0.4%). On the other hand, Samsung Electronics (-0.3%), Kia Corp (-1%), and Celltrion (-0.5%) were in the red.

Oil Holds Gains on Supply Disruption Fears

WTI crude futures held above $79 per barrel on Tuesday after gaining more than 1% in the previous session, underpinned by concerns over potential supply disruptions in Canada. Markets were worried that Canada’s wildfire season could affect the country’s 3.3 million barrels per day production capacity. In the Middle East, Iraqi oil minister Hayyan Abdul Ghani said over the weekend that they will comply with OPEC policy on production cuts to be made at its upcoming meeting on June 1, reversing a previous statement that Iraq would not agree to any new output cuts. Investors now look ahead to monthly market reports from OPEC and the International Energy Agency this week for fresh insights on supply and demand factors in the oil markets.

Asian Markets in Cautious Mood

Asian equity markets mostly declined on Tuesday as investors turned cautious ahead of key US inflation readings that could affect the interest rate outlook globally. Investors also assessed data showing producer inflation in Japan was steady in April compared with a year earlier, but import prices jumped due to the yen’s weakness. Shares in Australia, South Korea, Hong Kong and China posted small losses, while Japanese stocks edged up.

Hong Kong Stocks Muted

Shares in Hong Kong were almost flat at around 19,115 on Tuesday morning deals after rising in the prior three sessions, with traders anticipating an announcement on new tariffs on some Chinese goods later today from US President Biden, notably EVs and chips. The tariffs on EVs will rise to 100% from the current 25%. Investors also cautiously braced for April key activity data in China in the following days, including industrial output and retail trade. Still, the Hang Seng remained near its highest level in nine months, amid bets that China may be gearing up to cut banks' RRR after Beijing started its ultralong bond sales plan. On Wall Street, US-listed Chinese shares rallied overnight after Tencent Music Ent. surged by 11% with robust earnings in Q1.

Australian Dollar Muted on Budget Day

The Australian dollar was subdued around $0.66 as investors await details of the Australian government’s annual budget later today. The labor government is expected to announce another surplus in its annual budget due to strong employment, while traders focus on the details of the planned cost of living relief that is claimed to temporarily lower consumer inflation. Treasurer Jim Chalmers said he expects the current headline inflation of 3.6% to return to the Reserve Bank of Australia’s 2-3% target by the end of year. If that scenario plays out, the central bank will likely cut interest rates earlier than markets anticipated. Last week, the RBA held the cash rate steady and offered no explicit hawkish message, defying market expectations. Still, the RBA acknowledged that the recent progress on bringing down inflation has stalled and maintained their forward guidance of “not ruling anything in or out.”