Morning Wrap (13.05.2024)

Asia-Pacific indices are having a mixed session. Japan's Nikkei 225 index (-0.20%) and the FTSE China A50 index (-0.40%) are losing slightly. Other indices from China gain between 0.40-0.60% and Australia's S&P/ASX200 is trading 0.20% higher.

European index futures also point to a flat opening to the cash session. DAX and UK100 index contracts are gaining between 0.00-0.05%.

In the forex market, movements are quite moderate in the first part of the day. One of the stronger currencies is the USD, GBP and EUR. On the other side, AUD and NZD are among the weakest currencies.

China's consumer prices rose for the third consecutive month in April, while producer prices extended their declines.

China's consumer price index (CPI) rose by 0.3% y/y in April, following a 0.1% increase in March. The market forecast was for an increase of 0.1%. China's Producer Price Index (PPI) fell by 2.5% y/y in April, compared with the 2.8% decline seen previously, expectations of 2.3%.

US Secretary of State Antony Blinken said that the US could block further weapons systems to Israel if it continues its ground offensive in the southern Gaza Strip town of Rafah.

The US has already suspended shipments of 3,500 bombs weighing 907kg (2,000lbs) and 227kg (500lbs) over concerns about the scale of civilian casualties in Israel's war on the territory.

US Secretary of State Antony Blinken said on Sunday that Israel does not have a ‘credible plan’ to protect some 1.4 million Palestinian civilians in Rafah and warned that an Israeli attack could spark an uprising if all Hamas militants in the southern Gaza Strip city are not killed.

Iraq's oil minister said Iraq had made sufficient voluntary reductions and would not agree to any additional cuts proposed by the wider OPEC+ producer group at a meeting in early June. However, Iraq is committed to voluntary production cuts to date.

The cryptocurrency market is seeing increased downward pressure. Bitcoin is losing 0.80% and falling below the USD 61,000 level. In contrast, we are seeing even greater declines in the altcoin market. The total project capitalisation excluding BTC and ETH is trading down 2.00% to US$626 billion in total capitalisation. 

Ripple CEO Brad Garlinghouse says the US government is investigating stablecoin issuer Tether for evidence of illegal activity - which could have an unpredictable impact on cryptocurrency markets.