- The last session of the week in APAC markets resulted in declines in most of the major indexes from the region. Japan's Nikkei is losing nearly 1%, the Hang Seng is down 1.2%, and Australia's ASX 200 is subtracting 1.1%.
- Such weak sentiment is primarily the result of souring sentiment following strong PMI data from the US, which erased the euphoria over Nvidia's improved results and supported capital outflows to “safe havens,” including the US dollar.
- It is the USD that is leading the broad FX market this morning. On the other hand, sizable declines are seen on AUD and CHF.
- Futures based on stock indexes from the US and Europe now indicate that Friday's session will open without a common direction in the respective markets.
- What's more, today's trading may be a bit muted due to Monday's holiday in the US, US markets will not operate on that day. Trading in the US bond market will also be shortened today. The situation is similar in the UK. There, too, trading will be halted on Monday.
- In the FX market, the most important macro event was Japan's April inflation reading. CPI fell for the second month in a row, but all three major ones remained above the 2% target. While at first glance this is good news for the BOJ, the concern is that inflation is still costly in nature. BOJ policymakers are keen to make inflation more “demand-driven,” but sustainable domestic demand is struggling to make improvements, and private consumption levels remain weak.
- The USDJPY pair, however, did not react to the inflation report presented, intraday it is currently trading up nearly 1%.
- There is also a lot going on in the crypto market, although we are not seeing excessive price movements. The SEC has officially approved 19b-4 applications filed by VanEck, BlackRock, Fidelity, Grayscale, Franklin Templeton, ARK 21Shares, Invesco Galaxy and Bitwise to issue spot ETFs on Ethereum.
- The acceptance of ETFs is another milestone in the crypto market, which, along with the acceptance of Bitcoin ETFs, puts the market at a slightly more mature stage of adoption in regulated markets.
- The rollover of the U.S. natural gas futures contract (NATGAS) lifts the price of the commodity 11% higher, into the zone of the psychological $3 barrier.
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