GOLD: Fresh All-Time High
Jul-17 2024 03:59
Gold is steady in the Asia-Pac session, after hitting a fresh all-time high of $2482.42.
- Bullion closed 1.9% higher at $2469.08 on Tuesday, as traders placed stronger bets on Federal Reserve rate cuts this year and weighed an uncertain outlook for US politics.
- Lower rates are typically positive for gold, which doesn’t pay interest.
- US Treasuries finished near session bests on Tuesday with the long-end out-performing. The US 10-year yield finished 7bps lower at 4.16% versus a 4bp drop for the US 2-year to 4.42%. The early session sell-off following stronger-than-expected US Retail Sales data was completely reversed.
- Retail sales printed flat (-0.02% unrounded) growth m/m, slower than the +0.3% registered in May (upward rev from 0.1%), but above the -0.3% expected. Sales ex-autos (+0.4% vs 0.1% expected) and ex-auto/gas (+0.8% vs +0.2% expected) beat and with higher revisions.
- Gold has rallied by over 50% since late 2022, underpinned by demand from central banks, to diversify reserves and reduce their reliance on the US dollar.
- According to MNI’s technicals team, the breach of the bull trigger suggests technical conditions remain firmly in bullish territory.
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MNI EXCLUSIVE: NZ's Rapidly Slowing Economy
Jun-17 2024 03:58
MNI speaks to former RBNZ staffers about the rapidly slowing New Zealand economy and the future OCR track. --On MNI Policy MainWire now, for more details please contact sales@marketnews.com
BOJ: MNI BoJ Review – June 2024: JGB Purchase Announcement More Dovish, May Delay Rate Hike
Jun-17 2024 03:53
Executive Summary
- At its Monetary Policy Meeting (MPM) on June 13-14, the Bank of Japan (BoJ) kept its benchmark interest rate unchanged, maintaining it between 0 to 0.1% in a unanimous vote, a move widely expected by the market.
- The BoJ also announced plans, in an 8-1 vote, to reduce its bond purchases, with details to be specified at the next policy meeting.
- The announcement on future JGB purchases was seen as more dovish than expected, lacking clarity on the size and pace of reductions. The BoJ’s intent to consult market participants in "Bond Market Group" meetings indicates a cautious approach to policy normalisation.
- Governor Ueda emphasised that the reductions would be "substantial," aiming to counter perceptions of caution in delaying the cuts until July.
- However, he also noted the need to balance the impact of the upcoming Quantitative Tightening (QT) decision on the economy and market, suggesting the BoJ may avoid simultaneous rate hikes and "substantial" QT to prevent market shocks. This raises the risk of delaying rate hikes until September unless yen weakness intensifies pressure on the BoJ.
- Full review here:
ASIA STOCKS: Equities Lower, French Political Uncertainty Weighs On Sentiment
Jun-17 2024 03:30
Asian markets are lower today, reflecting investor anxiety over France’s political crisis and anticipation of upcoming central bank policy decisions. Japanese stocks led the declines, while Hong Kong shares rebounded due to positive Chinese retail spending data. Benchmark 10-year Treasuries slipped and US equity futures were little changed. Markets including Singapore, India, and Indonesia were closed for holidays.
- Japanese stocks opened lower as investor sentiment soured due to political uncertainties in France. The Topix index continued to decline, particularly weighed down by transportation and real estate sectors, with the broader market affected by concerns over potential government interventions in the yen market. The Topix is down 1.49%, Topix Bank Index is 0.95% lower, while the Nikkei 225 is 1.82%.
- South Korean equities extended losses, with the Kospi down 0.37%. The decline was driven by concerns over a possible delay in US Federal Reserve interest rate cuts. Large-cap stocks were mixed, with notable declines in Samsung Electronics and LG Energy Solution, while Hyundai Motor and Kia Corp. surged on news of Hyundai's IPO plans in India.
- Taiwan equities are little changed today, semiconductor names are the top performers. There has been little in the way of headlines out of the region today and with very little in the way of data this week, suspect the market to largely track global peers.
- Australian shares opened lower, influenced by global market concerns and awaiting the Reserve Bank of Australia's policy meeting outcome. The S&P/ASX 200 index fell 0.15%, with losses in Metals and Mining, Industrials & Real Estate offsetting gains in Financials
- Elsewhere, New Zealand equities are down 1.33% while Thailand equities are down 0.75%.
