Morning Wrap (25.10.2024)

• Yesterday's session on Wall Street resulted in gains for most stock indices. The Nasdaq ended the session 0.76% higher, while the S&P500 gained trading 0.21% higher. Moderate declines (-0.33%), however, were recorded by the Dow Jones index.

• A number of Chinese banks, including the Industrial and Commercial Bank of China and the Agricultural Bank of China, cut mortgage rates today, a move already announced by the Chinese establishment. Interest costs for households are expected to fall by a total of about 150 billion yuan ($21.05 billion) a year.

• In Tokyo, core consumer prices rose 1.8% y/y (1.7% was expected, 2.0% previously), below the BoJ's 2% target for the first time in five months. While the Tokyo data is not authoritative for Japan as a whole, it is a reasonable indication and is considered a leading indicator. The USDJPY pair is nevertheless under downward pressure today, which with their range push the pair to the 151.50 area.

• It is worth keeping an eye on this weekend's general election in Japan, which could end the Liberal Democratic Party's dominance of more than a decade, forcing the ruling party into power-sharing deals.

• Investors' attention will turn today to the release of IFO data from Germany and US durable goods orders. The retail sales reading from Canada is also worth looking at.

• On the currency market, the best performing currency today is the Japanese yen. Antipodean currencies, on the other hand, are trading under more downward pressure.

• Precious metals are losing value this morning. Gold is down 0.3% while silver is losing 0.45%.

• Natural gas gains 0.6% at the start of the last session of the week, while WTI crude oil holds near $70.4 per barrel.

• In the crypto market, we are seeing nearly 1% declines in Bitcoin, which is trading in the $67,500 zone. At the same time, Ethereum is losing nearly 2%.

Heatmap of the volatility currently observed in the FX market. Source: xStation