financetom
World
financetom
/
World
/
GLOBAL MARKETS-Stocks edge up, yen on intervention watch
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
GLOBAL MARKETS-Stocks edge up, yen on intervention watch
Jun 24, 2024 5:13 AM

*

Japan officials jawbone as dollar nears 160 yen

*

Fed's favoured inflation index looms large this week

*

US Presidential debate, French elections on horizon

(Updates prices at 1145 GMT)

By Wayne Cole and Amanda Cooper

SYDNEY/LONDON, June 24 (Reuters) - Global shares

steadied on Monday ahead of U.S. price data that investors are

banking on to show a renewed moderation in inflation, while

markets were on alert for Japanese intervention as the dollar

tested the 160-yen barrier.

Geopolitics also loomed large, with the first U.S.

presidential debate on Thursday and the first round of voting in

the French election at the weekend.

The MSCI All-World index rose 0.1% on the

day, having fallen for the previous two sessions. In Europe, the

STOXX 600 gained 0.5%, while U.S. index futures

were up 0.1%.

Japan's Nikkei closed up 0.5%, with the continued

decline in the yen putting pressure on the Bank of Japan to

tighten policy despite patchy domestic data.

Minutes of the central bank's last policy meeting out on

Monday showed there was much discussion about tapering its bond

buying and raising rates.

Japan's top currency official Masato Kanda was out early to

voice disapproval with the yen's latest drop which saw the

dollar reach as high as 159.94.

The dollar was trading just a shade softer at 159.74, eyeing

the 160.245 peak from late April where Japan is thought to have

started spending around $60 billion buying the yen.

Demand for carry trades - borrowing yen at low rates to buy

higher yielding currencies - has also seen both the Australian

and New Zealand dollars reach 17-year peaks on the yen.

"Fresh cyclical highs for the dollar versus the yen

overnight, further intervention jawboning from Japan's FX

supremo Kanda and continued pressure on the yuan underline the

pain being felt in Asia and EM more broadly from the Fed's high

for longer stance, and will probably revive 'currency wars'

chatter," Marc Ostwald, chief global economist at ADM Investor

Services.

PARSING THE PCE

Even the euro was testing recent highs at 170.87 yen

, despite being saddled with a round of soft

manufacturing surveys (PMI). The euro is heading for a drop of

1.2% in June, its largest monthly decline since January. But on

Monday, it was trading up 0.3% on the day at $1.0728.

"The decline in the euro area flash June PMI raises some

concern that the nascent rebound is being cut short," analysts

at JPMorgan wrote in a note.

"The abruptness of the drop is notable against the backdrop

of the French election, which was mentioned explicitly by firms

as a reason for the drag."

France's far-right National Rally (RN) party and its allies

were seen leading the first round of the country's elections

with 35.5% of the vote, according to a poll published on Sunday.

Manufacturing surveys from the United States, in contrast,

showed activity at a 26-month high in June, though price

pressures subsided considerably.

The latter shift whetted appetites for the personal

consumption expenditures (PCE) price index due on Friday. Annual

growth in the Federal Reserve's favoured core index is expected

to slow to 2.6% in May, the lowest in more than three years.

"Note that low PCE deflator outcomes are needed to keep the

y/y rate from rising through the course of this year given the

string of low prints in the second half of 2023," cautioned

analysts at NAB.

A low result would probably reinforce market bets on a Fed

rate cut as early as September, which futures currently price as

a 65% prospect.

There are at least five Fed speakers on the docket this

week, including San Francisco Fed President Mary Daly and Fed

Governors Lisa Cook and Michelle Bowman.

In commodity markets, gold pared losses in line with the

retreat in the dollar to trade up 0.3% at $2,327 an ounce, while

oil rose, pushing Brent crude up 0.4% to $85.57 a barrel

and U.S. crude also up 0.4% at $81.00.

(Additional reporting by Wayne Cole in Sydney; editing by

Muralikumar Anantharaman, Mark Heinrich and Sharon Singleton)

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Copyright 2023-2025 - www.financetom.com All Rights Reserved