Morning Wrap (16.09.2024)

The volatility in stock markets during the session in the Asia-Pacific region is limited due to holidays in Japan and China. Japanese markets are closed today for Respect for the Aged Day, while Chinese markets will remain closed until tomorrow due to the Mid-Autumn Festival.

Volatility in contracts is limited to +/- 0.30%. The market in China is trading flat between -0.10% and 0.10%. Japan's Nikkei 225 index is down 0.15%, while contracts on the SG20cash index in Singapore are trading 0.30% lower.

Futures contracts on European indices indicate a flat opening for the cash session. The DAX is gaining 0.10% to 18,720 points, while the UK100 is down 0.10% to 8,280 points.

US index futures are similarly low in volatility, except for the US2000 index, which reflects small-cap companies. US2000 is gaining 0.50% to 2,200 points, with growth supported by the upcoming interest rate cuts by the Fed this week.

Historically, the small-cap index has performed the best at the start of monetary policy easing in the U.S. Small companies are more sensitive to restrictive policy, so the beginning of rate cuts is raising investor hopes.

Volatility in the forex market is similarly low, with the exception of the U.S. dollar. The USDIDX index is down 0.25% to 100.5000 points, once again testing the lower limit of the consolidation channel of the last two years. The Fed's rate cut and Jerome Powell's communication during the conference may be a catalyst for a further downward trend in the USD.

Gold is hitting a new ATH at $2,588 per ounce, gaining 0.25% today. UBS analysts have confirmed their optimistic forecasts for gold, pointing to growth potential up to $2,700 by mid-2025.

On Saturday, China released a very weak set of economic data. We learned, among other things, about unemployment, industrial production, and retail sales. The data was weak, deepening the readings from July. Growth in industrial production in China slowed to its lowest level in five months in August, while retail sales and new home prices continued to decline.

Industrial production in August rose by 4.5% year-over-year, slowing from a pace of 5.1% in July and marking the slowest growth since March (expectations were 4.8%). Retail sales, a key consumption indicator, grew by only 2.1% in August despite the summer travel peak, slowing from 2.7% growth in July (expectations were 2.5%).

On Sunday, there was likely a second assassination attempt on Donald Trump's life. The incident occurred around 2:00 PM local time when U.S. Secret Service agents spotted a potential assassin aiming a firearm at Donald Trump, who was playing on a golf course. Shots were fired at the assassin, who then abandoned a rifle along with two backpacks, a scope used for aiming, and a GoPro camera, before fleeing in an SUV. The assassin was arrested. The FBI announced that it is treating the incident at Trump's golf course as an "assassination attempt" on the former president.

In the cryptocurrency market, we are observing a pullback that occurred yesterday. On Friday afternoon and Saturday, Bitcoin managed to hold above the $60,000 level. However, on Sunday, selling pressure proved too strong, and prices fell below the threshold to $58,400. Ethereum is losing slightly more, down to $2,280.