The Fed, ECB, and the PBOC all cut borrowing costs in September to boost economic growth. Market participants, anticipating further economic stimulus, have increased their bids on assets ranging from stocks to gold.
Asia & European Sessions:
- Asian stocks advanced on Friday, driven primarily by gains in Hong Kong and other Chinese markets, as China’s efforts to stimulate its economy gained momentum.
- JPN225 rose more than 1.4% to 39,560 post Inflation release and also as the ruling Liberal Democratic Party held a leadership election to determine Japan’s next prime minister (Ishiba). Despite the change in leadership, no significant policy shifts are expected due to the similarities between the leading candidates.
- Tokyo’s consumer inflation slowed to 2.2% y/y in September, aligning with market expectations.
- China’s industrial profits fell nearly 18% y/y, underscoring the challenges facing the world’s 2nd largest economy.
- Technical issues disrupted Shanghai trading, boosting the Shenzhen index by 6.4% before normal trading resumed.
- Micron Technology led gains with a 14.7% surge, following stronger-than-expected earnings due to increased demand for AI-related technology.
- Super Micro Computer saw the largest drop in the S&P 500, falling 12.2%. The company, which had tripled in value last year amid the AI boom, declined following a report that the US Department of Justice is investigating it.
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Bitcoin is on track for one of its strongest September performances, driven by the global trend of interest-rate cuts, especially the aggressive shift toward looser monetary policies in the US. Bitcoin is up 56% in 2024, buoyed by inflows into US Bitcoin ETFs, though still below its March high of $73,798.
Financial Markets Performance:
- The USDJPY jumped to 146.48, breaking the descending triangle spotted since August, while the EURUSD dipped slightly to 1.1170 from 1.1176.
- USOIL dropped to $66.80 per barrel, while UKOIL lost 19 cents to $70.90 per barrel.
- BTCUSD has surged over 10% this month, a sharp contrast to its typical average 5.9% drop in September over the past decade. It is currently settled at $65,371. The more relaxed financial conditions are benefiting the riskier areas of the crypto market.
- Gold posted new record highs, climbing by 1.5% to $2685 per ounce, yet another fresh peak.
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Andria Pichidi
Market Analyst
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