Global Market Highlights: November 19, 2024

Asia-Pacific Market Update

Asia-Pacific equities traded mostly in positive territory, mirroring the mild gains in U.S. markets, although momentum was capped by quiet newsflow. The ASX 200 outperformed, reaching a record high driven by strength in tech stocks and gold miners. Comments from Chinese President Xi and Australian Prime Minister Albanese, coupled with Morgan Stanley’s increased ASX 200 target, supported sentiment. The Nikkei 225 rose modestly as Japan edged closer to cabinet approval of its economic package, despite the yen’s slight strengthening. Chinese markets, including the Hang Seng and Shanghai Composite, swung between gains and losses as regulatory support pledges failed to offset concerns over EU demands for tech transfers from Chinese firms in exchange for subsidies.

Key Data:

• Japanese Machinery Orders fell by 0.7% MoM (vs. +1.9% expected).
• Singapore’s Non-Oil Exports dropped sharply by 7.4% MoM (vs. +2.3% expected).

European Equities

European equity futures indicated a positive open, with Euro Stoxx 50 futures up 0.3%, following a muted cash market session on Friday (-0.1%). Gains were underpinned by stable crude prices and resilient commodity demand. Investors are watching final Eurozone HICP data and commentary from ECB officials, including Elderson, for further guidance on inflation and monetary policy. Corporate earnings from major players like Sage and Severn Trent are also expected to influence the market.

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US Market Outlook

U.S. equity futures edged higher after mild gains in Monday’s session. The Nasdaq 100 led the way (+0.7%), supported by Tesla’s continued rally (+5.7%) following Trump’s election win. Broader markets remained buoyant as crude prices lifted Energy stocks and Communication Services performed well. Investors are focusing on Fed commentary, Nvidia earnings, and U.S. Flash PMIs later this week, with limited macroeconomic drivers expected today.

Notable Pre-Market Headlines:

• Senior U.S. officials are urging Congress to approve $100 billion in disaster relief funding.
• President-elect Trump is reportedly pushing for Matt Gaetz to be confirmed as Attorney General, though challenges in the Senate persist.

Fixed Income

U.S. Treasury yields traded within a narrow range overnight as thin newsflow limited market moves. Bund futures reclaimed the 132.00 level, while JGBs posted mild gains following a strong liquidity auction for long-term bonds. Market participants await Eurozone HICP data and central bank commentary for further cues.

Commodities

• Crude Oil: Prices held steady after gains driven by output disruptions in major oilfields in Kazakhstan and Norway, alongside a weaker dollar.
• Precious Metals: Gold remained above $2,600/oz, supported by geopolitical risks and ongoing inflationary concerns. Silver followed a similar trajectory.
• Copper: Prices saw mild gains, buoyed by positive risk sentiment and Chinese regulatory pledges.

Currencies

• DXY: The Dollar Index was steady above 106, with limited catalysts ahead of key U.S. events later this week.
• EUR/USD: The euro consolidated below 1.0600 as traders awaited Eurozone HICP data and ECB commentary.
• USD/JPY: The yen firmed slightly, with USD/JPY pulling back to test 154.00, as Japanese Finance Minister Kato reiterated the need for currency stability.
• GBP/USD: Sterling held its footing at 1.2600 as investors looked ahead to BoE speakers at the MPC Treasury Committee hearings.
• Antipodeans: The AUD outperformed, supported by cross-flows in AUD/NZD, while the NZD traded flat amid limited domestic drivers.

Crypto

Bitcoin regained ground overnight, climbing above $91,000, as market sentiment remained positive. Reports of President-elect Trump meeting privately with Coinbase CEO Brian Armstrong highlighted growing regulatory focus on the crypto industry.

Notable Headlines

• China: Chinese regulators pledged greater support for companies listing in Hong Kong and deeper financial integration in the Greater Bay Area. However, EU demands for tech transfers from Chinese firms in exchange for subsidies, particularly in the green sector, added to geopolitical tensions.
• Middle East: Lebanon and Hezbollah signaled openness to a U.S.-proposed ceasefire with Israel, while Israeli airstrikes on central Beirut underscored persistent regional instability.
• U.S.-Ukraine Policy: The Biden administration announced additional security assistance for Ukraine and lifted restrictions on Ukraine’s use of long-range missiles to target Russian territory. The Kremlin called the decision a provocation, warning of severe consequences.
• Japan: The government is finalizing an economic package aimed at boosting wages and addressing generational disparities, with cabinet approval expected by Friday.

Notable Events Today

• Final Eurozone HICP data.
• Canadian CPI figures.
• U.S. Building Permits data.
• Key earnings reports from Walmart, Lowe’s, Sage, and Medtronic.
• Speeches from ECB’s Elderson, BoE’s Bailey and Mann, and Fed’s Schmid.

Markets will also monitor developments in U.S.-Ukraine relations, ECB inflation commentary, and geopolitical tensions in the Middle East.