Morning wrap (26.09.2024)

The indices in the USA closed slightly negative yesterday. However, in the first part of today, we observe a rebound in futures. The US500 surpassed 5800 points for the first time, gaining 0.40%.

The session is also positive for indices in the Asia-Pacific region. Chinese indices are up by about 1.20%, the Singaporean SG20cash index is gaining 0.50%, the Australian AU200.cash index is up 0.70%, and the Japanese JP225 index is rising by 1.00%.

Yesterday's declines in U.S. stock indices were supported by a strong rebound in the dollar, which again tested the nearly three-year support zone around 100 points. The USDIDX index gained over 0.70% by the end of the day. Today, the dollar index is down about 0.10% and is at the level of 100.5000.

The minutes from the last BOJ meeting in July were published today. The Bank of Japan's policymakers were divided on how quickly the central bank should continue raising interest rates. Although the BOJ unexpectedly raised short-term interest rates to 0.25% by a vote of 7:2 at the July meeting, they kept them unchanged at the next meeting in September.

Only two board members saw the possibility of further rate hikes. The Japanese yen is one of the weaker currencies today, though the declines are not significant. USDJPY is up 0.05% to 144.7000.

China is considering recapitalizing its largest state-owned banks with up to 1 trillion yuan (142.39 billion USD). This is another step in the economic stimulus plan announced earlier this week. The recapitalization aims to increase the banks' capacity to support the struggling economy.

Gold is gaining another 0.16% to 2660 USD, and silver is trading higher by 0.30% to 31.800 USD.

Federal Reserve Governor Adriana Kugler said she strongly supports the Fed's recent decision to cut the Fed Funds Rate by 50 basis points. Kugler believes it would be appropriate to make additional rate cuts at upcoming meetings if inflation continues to decline as expected.

Kugler also referred to the PCE report, which will be published on Friday. According to her, inflation should come in at 2.7% year-over-year to meet expectations and maintain progress toward the 2.0% target.

Congress in the US yesterday passed legislation to fund the government through December and provide more than $230 million in emergency funding for the Secret Service. Lawmakers had a deadline of 30 September to pass new funding laws and avoid a government shutdown. The new legislation extends this deadline to 20 December and funds the government at current levels until then.

In the cryptocurrency market, we are seeing further consolidation after the recent gains. Bitcoin is up 0.55% to 63500 USD and remains below the resistance zone above 64000 USD. Ethereum is gaining 0.80% to 2600 USD, but this is because Ethereum experienced the largest declines yesterday.