Moving markets today: Asian shares rise with Wall Street, bitcoin hits $69,000; Fed’s Powell holds rate cut stance, ECB policy in focus
U.S. stocks wrapped up on a positive note as Federal Reserve Chair Jay Powell assured that interest rates wouldn’t rise more, though emphasizing the need for further progress on inflation. Asian markets rallied in response to this relief over U.S. rates. China witnessed a 7.1% surge in exports and a 3.5% growth in imports during January and February. Investors are now keeping an eye on upcoming policy moves in Europe. Nikki Haley has halted her White House bid without throwing her support behind Donald Trump. Market attention now shifts to the U.S. weekly Initial Jobless Claims and Fed Chair Powell’s second testimony scheduled for Thursday. Here are five key takeaways for your day.
China saw 7.1 per cent surge in January-February exports, imports expand by 3.5 per cent
According to recent customs data released on Thursday, China’s exports saw a 7.1% year-on-year increase, while imports rose by 3.5% during the January-February period, surpassing earlier forecasts. The country recorded a trade surplus of $125.16 billion during this time frame. Specifically, China’s trade surplus with the United States amounted to $47.29 billion for January-February, based on customs data, Reuters reported.
Moreover, data revealed on Thursday indicated that China’s crude oil imports in the first two months of 2024 surged by 5.1% compared to the previous year. This rise in imports, totalling 88.31 million metric tons or around 10.74 million barrels per day (bpd), was driven by refiners increasing purchases to meet the heightened demand for fuel during the Lunar New Year holiday. This figure contrasts with the 10.4 million bpd recorded during the same period last year, according to the General Administration of Customs.
Fed’s Powell eyes rate cuts despite uncertain inflation progress
In his semi-annual testimony on monetary policy to Congress, Powell addressed lawmakers regarding the economy. He noted significant progress and indicated that interest rates, currently at a 23-year high ranging from 5.25% to 5.5%, were unlikely to rise further. He cautioned that achieving the Federal Reserve’s 2% inflation target was uncertain, and any rate cuts would be deferred until officials were more confident. Powell stressed the importance of not adjusting policy prematurely, as it could reverse inflation progress, necessitating stricter measures. Conversely, delaying policy adjustments could weaken economic activity and employment excessively, the FT reported.
Nikki Haley withdraws from U.S. presidential race
Nikki Haley has decided to end her run for president without throwing her support behind Donald Trump, her rival. Despite gaining support from donors, her campaign failed to resonate enough with Republican voters. She made the announcement in a brief speech in her home state of South Carolina, following Trump’s victory in nearly all the Republican primary contests on Super Tuesday.
What’s coming up
Investors are eagerly awaiting updates on European policy decisions. The European Central Bank is poised to keep interest rates unchanged at a record 4.0%. However, any signals from policymakers suggesting a potential rate cut in June would be reassuring for the markets.
Futures markets are largely predicting the likelihood of an initial rate cut from the ECB in June, with expectations of a total easing of 88 basis points throughout the year.
Investors will also pay close attention to the weekly Initial Jobless Claims report from the United States, as well as Federal Reserve Chair Powell’s second testimony scheduled for Thursday.
Asian shares soar on back of U.S. rate relief
The stock market saw positive movements as the Dow Jones Industrial Average rose by 0.20% to reach 38,661.05 points. Similarly, the S&P 500 increased by 0.51% to 5,104.76 points, while the Nasdaq Composite climbed by 0.58% to hit 16,031.54 points. In Asian markets, MSCI’s broadest index for Asia-Pacific shares, excluding Japan, experienced a 0.6% rise, though Japan’s Nikkei N225 fell by 0.8% after reaching a new high earlier. Chinese blue chips CSI300 and the Shanghai Composite index both saw gains of 0.3% and 0.4% respectively. However, Hong Kong’s Hang Seng index stood out with a 0.3% decrease. In other regions, Japan’s Topix remained stable, South Korea’s Kospi rose by 0.6%, and Australia’s S&P/ASX 200 edged up by 0.1%.
Treasury rates held steady in Asia, with the 10-year U.S. yield unchanged at 4.1156%. Commodity prices rallied due to a weaker dollar, with gold prices remaining steady at $2,148.76 per ounce after reaching a record high of $2,152.09 overnight. Meanwhile, Bitcoin hovered near its record highs, trading at $66,153.