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World News Round up

FX Updates: Brazilian Real Depreciates by 1.01%

Top currency losers are Brazilian Real (-1.01%) and Dollar Index (-0.31%). Gains are led by Mexican Peso (0.77%), Australian Dollar (0.68%) and Polish Zloty (0.65%). In addition, there was a slight change on Euro (0.36%), British Pound (0.29%) and Japanese Yen (0.02%).

Energy Commodities Updates: Natural gas Rallies by 5.53%

Top commodity gainers are Natural gas (5.53%), Natural Gas UK GBP (0.89%) and Natural Gas EU Dutch TTF (0.86%). Biggest losers are Methanol (-3.29%). In addition, there was a slight change on Crude Oil WTI (0.84%) and Brent Crude Oil (0.73%).

Metals Commodities Updates: Silver Gains by 3.72%

Top commodity gainers are Silver (3.72%), Copper (1.71%) and Gold (1.61%).

New Zealand Factory Activity Improves in April, But Still Contractionary

The BusinessNZ Performance of Manufacturing Index in New Zealand improved to 48.9 in April 2024, from 47.1 in the preceding month, but remained in contraction for 14 consecutive months. Production (50.8 vs 45.7 in March) returned to expansion for the first time since January 2023. Also, Employment (50.8 vs 50.1) and Finished Stocks (50.4 vs 46.9) both returned to slight expansion. In contrast, New Orders (45.3 vs 48.3) remained firmly in contraction, although showing a slight improvement from March. Despite the small improvement in April, the proportion of negative comments again increased to 69%, compared with 65% in March and 62% in February. An overall lack of sales and orders was the dominant theme in comments, along with a struggling economy.

Peru Lowers Interest Rate by Another 25bps

Peru’s central bank cut its policy rate by 25 basis points to 5.75% during its May policy meeting, as expected. The decision came after the inflation rate in the previous month eased to the central bank's target range. The twelve-month inflation expectations remained at 2.6 percent in April and were within the inflation target range for the fifth consecutive month. Most indicators of economic activity expectations showed a slight deterioration, while leading indicators show recovery so far this year. The board noted that the outlook for global economic activity points towards moderate growth in a context of lower inflationary pressures. However, volatility in financial markets remains. The bank reaffirmed its commitment to adopt the necessary actions to maintain inflation within the target range.

Japan Personal Spending Falls Less than Expected

Household spending in Japan dropped in real terms by 1.2% yoy in March 2024, compared with market forecasts of a 2.4% fall and following a 0.5% decline in the prior month. It was the 13th straight month of decreasing personal expenditure.

Japan Current Account Surplus Below Forecasts

Japan’s current account surplus increased to JPY 3,398.8 billion in March 2024 from JPY 2,360.0 billion in the same month a year earlier. It was the 14th straight month of surplus in the current account but less than the market consensus of a gain of JPY 3,489.6 billion.

Japan Loan Growth Eases in April

The value of loans in Japan increased 3.1% year-on-year in April 2024, slowing from a 3.2% growth in March which was the fastest pace in ten months. Outstanding loans held by the country's major, regional, and "shinkin" banks stood at 622.1 trillion yen. Major and regional banks were principal loan growth drivers, surging 4.2% and 3%, respectively, while "shinkin" banks added 0.2%.

Stocks in Hong Kong Hit 35-week High

HK50 increased to a 35-week high of 18677.00 Index Points. Over the past 4 weeks, Hong Kong Stock Market Index (HK50) gained 8.44%, and in the last 12 months, it decreased 6.11%.

Gold Rises Above $2,350

Gold prices rose past $2,350 per ounce on Friday, driven by traders' expectations of a Federal Reserve interest rate cut following recent economic data. Thursday's data revealed a higher-than-expected increase in Americans filing for unemployment benefits last week, indicating a gradual cooling of the labor market. Investors anticipate that the Fed will initiate its easing cycle in September. Lower rates tend to benefit non-yielding gold. However, traders will closely monitor next week's CPI and PPI releases for further insights into the Fed's monetary stance, given reservations expressed by some Fed officials about easing. Meanwhile, robust investment in the over-the-counter market, ongoing central bank purchases, and increasing Asian demand fueled gold's rise. Also, stalled Middle East ceasefire talks and escalating Ukraine tensions heightened its risk premium. Over the week, the bullion is poised to rise by 2.2%.

South Korean Shares Track Wall Street Gains

The benchmark KOSPI rose 0.8% to around 2,733 points in early trade on Friday, reversing losses from the previous session, tracking Wall Street’s overnight gains after the recent release of US economic data. On Thursday, US initial jobless claims unexpectedly rose to over an 8-month high, indicating a weakening labor market and adding weight to the case for the Fed to cut interest rates sooner. At home, South Korean President Yoon Suk Yeol advocated for tax incentives to motivate corporate engagement in the government's reform program, along with specific measures aimed at enhancing corporate governance. Among sectors, financials posted the biggest increase, with notable rises from KB Financial (4.3%), Shinhan Financial (3.1%), Hana Financial (4%), and Samsung Life (4.1%). Other index heavyweights also advanced, including SK Hynix (2.6%), Kia Corp (0.8%), and Celltrion (2.1%). Over the week, the benchmark index is set to climb 2.1%, its third straight weekly gain.

Oil Set for Weekly Advance

WTI crude futures climbed toward $80 per barrel on Friday, rising for the third straight session and set for a strong weekly advance as an improving global demand outlook and ongoing hostilities in the Middle East lifted oil prices. On Thursday, data showed that crude oil imports in China increased in April, with robust trade figures in the world’s top crude importer signaling improving demand. In the US, a surge in weekly unemployment claims bolstered expectations for Federal Reserve interest rate cuts. However, several Fed officials indicated that rates could stay elevated for some time as upside risks to inflation remain. Meanwhile, Israel said it would proceed with plans to invade Rafah and other parts of Gaza as the latest round of peace negotiations in Egypt yielded no progress. Elsewhere, the outlook for OPEC production policy also remains highly uncertain ahead of the group’s policy meeting on June 1.

China Construction Bank Hits 12-month High

China Construction Bank increased to a 12-month high of 5.53 HKD. Over the past 4 weeks, China Construction Bank gained 12.68%, and in the last 12 months, it increased 1.29%.

Hong Kong Stocks Head for Third Straight Weekly Gains

Shares in Hong Kong soared 250 points or 1.4% to 18,791 on Friday morning trade, increasing for the second session to hover at their highest in eight months, as China reportedly was considering a dividend tax waiver. Regulators are reviewing a plan to exempt individual investors from paying dividend taxes on the city's stocks bought via Stock Connect. The plan comes as Hong Kong tries to revive its market following a recent downturn. The Hang Seng is pointing to the third straight weekly gain, up around 1.3%, amid solid trade data in the mainland for April. Adding to the bullish traction was an upbeat session on Wall Street overnight after US jobs data supported the case for rate cuts by the Fed. Capping the rises was vigilance ahead of Chinese inflation numbers. Financials, property, and financials drove gains. Hong Kong Exchanges surged 5.6% while other large-cap also gained, including Citic Ltd. (2.6%), Haidilao Intl. (2.4%), Trip.Com (2.0%), and Hansoh Pharmaceutical Group (1.0%).

China Stocks Ease From Multi-Month Highs

The Shanghai Composite fell 0.4% to around 3,140 while the Shenzhen Component dropped 1% to 9,685 on Friday, with mainland stocks retreating slightly from multi-month highs as investors continued to assess the economic and policy outlook in China. On Thursday, data showed that Chinese imports and exports returned to growth and exceeded forecasts in April, signaling an improvement in demand. However, the latest figures dented sentiment around further policy easing. High-growth technology, healthcare and consumer-related stocks led the decline, with notable losses from Dawning Information (-4.2%), Zhongji Innolight (-2.6%), Naura Technology (-5.7%), Wuxi Apptec (-1.7%), Kweichow Moutai (-1%) and Seres Group (-2.4%).

New Zealand Dollar Pulls Back from 1-Month High

The New Zealand dollar fell to around $0.601, retreating from a one-month high, buoyed by the improved US Dollar. The Kiwi surged on Thursday propelled by a decline in the US Dollar after a soft report on US jobless claims prompted traders to raise bets of an interest rate cut from the Federal Reserve later this year. Markets look toward ongoing US data for clearer direction on the Fed’s interest rate path, with crucial inflation data slated for release next week. Domestically, the Reserve Bank of New Zealand is widely expected to maintain its interest rate at 5.5% in its meeting later this month. This stance is in line with the OECD’s recent call for the central bank to keep policy restrictive until there are clearer indications that inflation is moving towards the target.

Sensex Rises But Points to Big Losses Weekly

Shares in India increased 347.1 points or 0.5% to 72,757.3 in early deals on Friday, rebounding from a plunge of nearly 1.5% in the prior session, tracking gains on Wall Street overnight on the back-improving sentiment about US rate cuts after weekly jobless claims rose more than expected. Markets tried to escape from a four-week low a day before, supported by rises among consumer goods, pharmaceuticals, metals, and auto. BPCL and ITC led the gains, up by 2.6% and 2.4% each. Other top movers were NTPC (1.8%) and JSW Steel (1.8%). Traders continued to braced for Q4FY24 earnings results, including Tata Motor, Cipla, and Bank of Baroda later today after the bank’s Q4 results beat estimates. Investors await India's industrial output figures for March later today after hitting its highest in four months last month. However, the BSE Index is heading for a slump of 1.5% for the week, the first weekly decline in three weeks amid concerns surrounding the ongoing national election's outcome.

UK Construction Output Falls More than Expected

Construction output in the UK shrank by 2.2% year-on-year in March 2024, following a 2.0% contraction in the prior month, worse than market forecasts of a 1.2% drop. It was the second straight month of decline in construction output as new work dropped faster (-8.5% vs -7.8% in February) while repair

UK Manufacturing Output Rise at Softer Pace

Manufacturing production in the UK increased 0.3% month-over-month in March 2024, easing from an 8-month high of a 1.2% growth in February but against market estimates of a 0.4% drop. Production moderated for food, beverages

Sweden New Orders Rebound in March

Total orders received by Swedish industries rose by 1% year-on-year in March 2024, rebounding from a downwardly revised 3.3% fall in the prior month. It was the first growth after fourth consecutive month of decline, as orders from customers abroad (7.9% vs 0.1%) increased sharply. Meanwhile, domestic demand continued to fall (-9.4% vs -7.8%). On a seasonally adjusted monthly basis, new orders slowed to 1.8% in March from 5.1% rise in the previous month.

Danish Inflation Rate Edges Down to 0.8%

The consumer price inflation rate in Denmark inched down to 0.8% year-on-year in April 2024 from 0.9% in the previous month, due to softer rises in clothing and footwear (0.9% vs 1.7% in March) and leisure and culture (3.0% vs 3.1%), amid falls in housing and utilities (-0.4% vs 0.1%). Overall, services prices rose at a softer rate (2.9% vs 3.5%) on the back of rents, while goods prices continued to decline (-1.5% vs -1.7%) due to lower electricity. Core inflation, excluding volatile items like food and energy, dropped to 1.5% in April, marking its lowest level since October 2021.

SAP Hits 4-week High

SAP increased to a 4-week high of 177.90 EUR. Over the past 4 weeks, SAP gained 3.63%, and in the last 12 months, it increased 44.7%.

Slovakia Industrial Output Tumbles in March

Industrial production in Slovakia tumbled 6.9% year-on-year in March 2024 from an upwardly revised 0.1% rise in the previous month, and missing market expectations of 0.1% gain. It was the first fall in industrial activity since July 2023, as output further dropped for manufacturing (-9.7% vs -1.5%) and mining

Turkey Industrial Output Growth Eases from 2-Year High

Turkey’s industrial production rose 4.3% year-on-year in March 2023, broadly slowing from a revised two-year high of 11.2% advance in the previous month. Output growth sharply eased for all main sub-sectors, namely mining

The DAX Index Opens 0.59% Higher

In Frankfurt, the DAX Index is up by 111 points or 0.59 percent on Friday. Top gainers are Zalando (3.19%), Munich RE (2.26%) and Siemens Energy (1.80%). Biggest losses came from Symrise (-1.69%), Puma (-1.10%) and SAP (-0.38%).

European Shares on Track for Best Week since January

European stocks were in the green on Friday, with both the STOXX 50 and the STOXX 600 gaining 0.5%, putting them on track to end the week with a 3% increase, marking the best weekly gain since January. Prospects that major central banks will soon start lowering borrowing costs and strong corporate results are contributing to the optimistic investor sentiment. Basic resources and energy were among the top performing sectors. On the corporate front, IAG 's loss narrowed in Q1 and said that it was well positioned for the summer. Iveco profit beat and German retailer Zalando was upgraded by Berenberg to 'buy' from 'hold'.

Moldova Inflation Rate Lowest Since 2021

The annual inflation rate in Moldova slowed to 3.5% in April 2024 from 3.9% in the previous month. This marked the lowest reading since July 2021, as prices tumbled for services (-2.6% vs 0.9% in March). On the other hand, costs rose further for food (3.8% vs 2.9%) and non-food products (7% vs 6.7%). On a monthly basis, consumer prices grew 1.8% in April, accelerating from 0.5% gain in the prior month.