Moving markets today: Asian stocks rebound, oil and gold decline, bitcoin jumps 3 per cent; watch for ‘magnificent seven,’ Boeing, Airbus earnings and US PCE inflation data
Asian stock markets bounced back from previous losses, buoyed by reduced concerns about a potential escalation of conflict in the Middle East. This shift in sentiment led to an increase in bond yields and a return of investor interest in riskier assets. As a result, both gold and the safe-haven dollar saw declines, while crude oil prices also dropped amid diminished fears of significant supply disruptions. Additionally, China decided to maintain its benchmark lending rates without any changes. In response to recent price cuts in the US, Tesla announced reductions in prices for its vehicles in China, Germany, and other global markets. The upcoming week holds particular significance for investors, with major companies like Tesla, Meta Platforms, Alphabet, and Microsoft scheduled to release their quarterly reports. Furthermore, market watchers will closely monitor the release of the monthly US Personal Consumption Expenditures Price index on Friday, a crucial indicator of inflation trends ahead of the Federal Reserve’s upcoming meeting. Here are five key takeaways for your day.
China holds steady: No change in benchmark lending rates
China opted to keep its benchmark lending rates unchanged during the monthly fixing on Monday, aligning with what the market had anticipated. Specifically, the one-year loan prime rate (LPR) remained steady at 3.45 per cent, while the five-year LPR saw no change, remaining at 3.95 per cent.
UK home asking prices near record high: Rightmove
In Britain, home prices are nearing their highest levels on record, driven by the largest annual increase in a year, as per a recent industry survey. This suggests that the housing market’s strong performance from early 2024 has continued into April, Reuters reported.
Rightmove, a property website, revealed on Monday that asking prices for residential properties surged by 1.7 per cent in the four weeks leading up to April 13 compared to the same period last year. Meanwhile, month-on-month increases in seller asking prices slowed slightly to 1.1 per cent, down from a 1.5 per cent rise in the previous four weeks.
Rightmove reported that the average new seller asking price stood at £372,324, just £570 short of the record high set in May 2023.
Tesla’s worldwide price cuts: China, Germany, and more follow US trend
Tesla has dropped prices in several major markets, including China and Germany, after reducing prices in the United States. This move comes as Tesla faces declining sales and increased competition, especially from Chinese electric vehicle (EV) manufacturers, Reuters reported.
In China, the starting price of the revamped Model 3 has been cut by 14,000 yuan to 231,900 yuan, as seen on Tesla’s official website on Sunday. Meanwhile, in Germany, the price of the Model 3 rear-wheel-drive model has been lowered from 42,990 euros to 40,990 euros, maintaining this price since February. Additionally, Tesla spokesperson mentioned price cuts in various other regions across Europe, the Middle East, and Africa.
What’s coming up: A look ahead
This week is packed with corporate earnings reports, featuring big names like Tesla, Meta Platforms, Alphabet, and Microsoft, known as the “Magnificent Seven” for their role in driving the S&P 500’s impressive 24 per cent gain last year. Boeing, facing its own challenges, will reveal its first-quarter figures on Wednesday, just ahead of Airbus.
While economic announcements are relatively light this week, all eyes will be on Thursday’s release of US first-quarter growth figures. On Tuesday, the latest purchasing managers’ index reports for G7 nations and India will offer insights into global economic trends.
The Bank of Japan is expected to maintain interest rates at its Friday meeting, but market watchers will be closely monitoring its Outlook Report.
Additionally, Friday will see the release of the monthly US Personal Consumption Expenditures Price Index, a key inflation indicator ahead of the Fed’s April 30-May 1 meeting. Notably, expectations for interest rate cuts have diminished, with Fed funds futures now pricing in less than 40 basis points in cuts for the year, down from the 150 bps projected at the beginning of 2024.
Hong Kong’s market surge elevates Asian equities; Bitcoin rises post halving
Monday saw a positive start for Asian stocks, led by Hong Kong’s Hang Seng index, which surged by 1.8 per cent. Mainland China’s CSI 300 index also showed a slight increase of 0.2 per cent. Japan’s Kospi index climbed by 1 per cent, and South Korea’s Kospi index followed closely with a 0.9 per cent rise. Australia’s main index recorded a gain of 0.96 per cent.
Meanwhile, the dollar index, gauging the dollar against other major currencies, saw a slight dip of 0.05 per cent to 106.05, following last week’s peak at 106.51. Gold prices slipped by 1.06 per cent to $2,366.40, stepping back from last week’s almost record-breaking high of $2,431.29.
Crude oil prices experienced a decline, as traders refocused on market fundamentals. Brent futures fell by 0.77 per cent to $86.62 a barrel due to an increase in US stockpiles. The front-month US West Texas Intermediate (WTI) crude contract for May, which expires on Monday, dropped by 0.26 per cent to $82.92 a barrel, while the more active June contract decreased by 0.9 per cent to $81.57 a barrel.
Bitcoin saw a 3 per cent rise, hitting $65,704. This weekend, the largest cryptocurrency in the world went through its “halving,” an event that occurs roughly every four years. The purpose of this phenomenon is to slow down the creation rate of bitcoins.