Morning Wrap (12.02.2024)

Indices in the Asia-Pacific region remain mainly closed in Japan, South Korea and China, among others. Australia's S&P ASX 200 is losing 0.25%. China has begun a two-week New Year's break and for this reason markets will remain closed until 17 February.

In the first part of the forex market session, there are no major movements. The New Zealand dollar is one of the weaker currencies, losing 0.2-0.4% against the rest of the currencies.

UBS is optimistic about the Australian dollar in 2024, citing several local factors, including commodity prices, which have been resilient despite the still unpromising state of China's economy.

RBNZ Governor Orr stated that inflation remains too high, which is why the Reserve Bank of New Zealand recently maintained the cash rate at 5.5%.

The Israeli military reported that it rescued two hostages from captivity in Rafah in the Gaza Strip. Meanwhile, Israeli attacks on the southern city killed at least 37 people and injured dozens, local health officials reported.

Moody's agency downgraded Israel's debt rating on Friday, warning that the ongoing war in the Gaza Strip and a possible war in the north with Hezbollah could negatively impact Israel's economy.

Israel's Finance Minister expressed dissatisfaction on Sunday with Moody's decision to downgrade Israel's credit rating, saying the change is a "political manifesto" that "lacks serious economic foundations."

The President of the Federal Reserve Bank of Dallas, Lorie Logan, said on Friday at the end of the day that there is no urgent need to lower interest rates, although "tremendous progress" has been made in reducing inflation. The Bank's head wants confirmation of the sustainability of the inflation decline in upcoming data.

There are no major changes in the energy commodities market. Natgas, which is losing more than 2.7%, is again the leader of the declines, and oil is trading unchanged.

Over the weekend, the cryptocurrency market continued to rise. Investors' attention was primarily focused on Bitcoin, which once again made the largest gains, rising to two-year highs of around 48,000 USD. Ethereum remains equally high at 2,500 USD.