👀 Copy Legendary Investors' Portfolios in One ClickCopy For Free

Morning Bid: Stocks on firmer footing after wild week

Published 07/26/2024, 12:34 AM
Updated 07/26/2024, 12:35 AM
© Reuters. FILE PHOTO: A general view shows the trading floor at the stock exchange in Frankfurt, Germany October 2, 2017. Zoomed image is taken on slow shutter speed. REUTERS/Kai Pfaffenbach/File photo
USD/JPY
-

A look at the day ahead in European and global markets from Kevin Buckland

An element of calm has returned to markets as a wild week winds down, with European and U.S. stock futures pointing overall higher on Friday following the frenetic selling of the previous two days.

Asia-Pacific equity benchmarks were overall flat to higher, with some weakness in Chinese markets contrasting with robust gains for Australia and South Korea.

Taiwan was an unhappy exception, though, with a 3.4% slide - a delayed reaction to the global tech rout after markets there were shuttered the previous two days by a typhoon.

Currency markets stabilised as well, with the yen finding a home around 154 per dollar following its surge from a three-decade low near 162 just over two weeks ago. On Thursday, it reached a nearly two-month peak of 151.945 per dollar.

Investors were frantically unwinding long-held bearish yen bets and/or seeking a safe haven play with the Japanese currency, spurred by a spate of weak U.S. economic data, the global equity sell-off, and growing speculation of a Bank of Japan rate hike next week - not to mention the helping hand of some deft currency intervention by Tokyo.

IG analyst Tony Sycamore said there's "a brick wall of demand" for dollars around 152 yen that he expects to hold firm until Wednesday of next week, when both the BOJ and Fed decide policy. "After that, all bets are off."

The dollar also drew a modicum of macro-related support from faster-than-expected U.S. GDP growth in data released overnight, alleviating fears that the economic expansion was at risk of ending abruptly.

However, a cooling of price pressures keeps bets alive for a September Fed cut, and the dollar is edging lower against the likes of the euro and sterling heading into the European morning.

There's little in the way of economic data or earnings reports to shake up markets in European hours, but the U.S. PCE deflators - a favourite inflation measure of the Fed's - could inject some additional volatility before the weekend.

Key developments that could influence markets on Friday:

© Reuters. FILE PHOTO: A general view shows the trading floor at the stock exchange in Frankfurt, Germany October 2, 2017. Zoomed image is taken on slow shutter speed. REUTERS/Kai Pfaffenbach/File photo

-US PCE price index (June)

-US earnings include 3M, Bristol Myers (NYSE:BMY) Squibb, Colgate Palmolive

(By Kevin Buckland; Editing by Edmund Klamann)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.