Moving markets today: Asia shares follow US peers upward, yen breaks below ¥160, oil and gold prices slide; Apple and Amazon earnings, Fed meeting, jobs data, and more in focus this week
Asian markets began the week on a positive note as investors anticipated the Federal Reserve’s upcoming policy meeting. The dollar made a significant milestone by surpassing the 160-yen mark for the first time in decades. Japan’s market remained closed due to a holiday. Oil prices experienced a 1 per cent drop amid ongoing ceasefire talks between Israel and Hamas. Concerns arose about China’s economic recovery after a decline in industrial profits for March. Earnings reports are anticipated from the influential “Magnificent Seven” companies, which drove market growth last year, with Amazon scheduled to report on both Tuesday and Thursday. The focus will shift to the Federal Reserve on Wednesday as it releases its latest monetary policy statement following its two-day meeting. Here are five key takeaways for your day.
China’s March industrial profit drop sparks economic recovery concerns
Data released on Saturday showed China’s industrial profits dropped in March, slowing the quarter’s growth compared to earlier months, and sparking concerns about the country’s economic recovery.
National Bureau of Statistics data showed a 4.3 per cent increase in industrial profits to 1.5 trillion yuan ($207.0 billion) in Q1, slower than the 10.2 per cent rise in the first two months. March saw profits fall by 3.5 per cent year-on-year. The NBS, while not providing monthly breakdowns for January and February, previously noted a consistent increase in profits since August 2023, Reuters reported.
US CEO pay jumps 9 per cent, exacerbating transatlantic wage gap
CEO pay within the S&P 500 saw a significant uptick of 9 per cent to reach a median of $15.7 million by April 15, widening the already substantial compensation divide between American and British corporate leaders. Despite the lacklustre performance of certain US companies last year, an analysis by ISS-Corporate, a branch of Institutional Shareholder Services, revealed these salary hikes, the FT reported.
Meanwhile, in the UK, there’s mounting pressure on FTSE boards to boost the compensation of their chief executives. British CEOs argue that they are being paid less compared to their counterparts across the Atlantic, with some even suggesting that failing to address this issue could lead to a talent drain.
Oil prices drop 1 per cent amid Israel-Hamas ceasefire talks
Oil prices in Asia fell on Monday, reversing gains from Friday, as peace talks in Cairo between Israel and Hamas eased Middle East conflict fears. Brent crude futures dropped by nearly 1 per cent to $88.71 a barrel, while West Texas Intermediate (WTI) futures slipped about 1 per cent to $83.16 a barrel.
A Hamas representative informed Reuters that a delegation from the organization is scheduled to meet in Cairo on Monday for discussions aimed at securing a ceasefire. These talks come as mediators intensify efforts to reach an agreement, particularly in anticipation of potential Israeli military actions in the southern city of Rafah.
Focus turns to US Fed rate decision and jobs data in upcoming Wall Street week
This week’s economic spotlight falls squarely on the US Federal Reserve’s upcoming decision on interest rates, scheduled for Wednesday. However, expectations lean towards the Fed maintaining its current course as inflation isn’t decreasing as rapidly as anticipated. Several economists now anticipate a potential rate cut later in the year, possibly post the US presidential election in November. All eyes will be on Fed Chair Jay Powell’s post-meeting press conference for insights.
Alongside this, a plethora of economic data is set for release. This includes fresh US employment figures on Friday and international comparisons of manufacturing purchasing managers’ index figures. Some variations are expected due to public holidays in several countries on Wednesday. Japan will provide updates on industrial production and employment, while the EU will unveil preliminary first-quarter GDP estimates for both the entire trade bloc and key economies like France and Germany.
Company earnings reports will also continue to be a major focus, with significant announcements expected from Amazon.com, Apple, HSBC, Samsung, and Shell. Furthermore, attention will be drawn to annual meetings, notably that of takeover target Anglo American on Tuesday.
In the UK, all eyes will turn to the local and mayoral elections in England and Wales on Thursday. These elections will determine the leadership of London and the country’s next two largest cities, Birmingham and Manchester, the FT reported.
Yen dives below ¥160 against US Dollar; Hong Kong stocks extend surge
Stock markets across Asia saw gains following a positive trend in the US markets, as concerns about the Federal Reserve adopting a more aggressive stance eased with a report showing softer inflation. Australia and South Korea experienced rises in stock prices at the opening of trading, while Japan’s market remained closed due to a holiday. US futures showed a slight uptick after the S&P 500 climbed 1 per cent on Friday.
The Japanese yen continued to weaken against the dollar on Monday, while Hong Kong’s stock market maintained its upward momentum, extending a weeklong rally. The yen fell below 160 per dollar to its lowest level since April 1990.
In Hong Kong, stocks kept rising after assurances from Chinese authorities to uphold the city’s global financial status. The Hang Seng index rose by 1.40 per cent, led by notable gains from AIA, an insurance group, and Longfor Group, a Chinese developer, both recording increases of over 6.0 per cent. Meanwhile, China’s CSI300 index edged up by 1.16 per cent.
The dollar index remained relatively stable at 105.95, with a monthly gain of 1.4 per cent on the horizon. Gold prices dipped by 0.46 per cent to $2,327.12 per ounce.