Morning wrap (06.02.2025)

The Asia-Pacific region indices are mostly trading in a positive mood. The CH50cash index is gaining 0.71%, the JP225 index is up 0.35% to 39,000 points. The Singaporean SG20cash index is up 0.04%, while the Australian AU200cash index is gaining 0.55%.

Futures on European indices indicate a higher opening of the cash session. The German DAX index is gaining 0.17% and remains above 21,700 points, the British UK100 is up 0.23%, and the European EU50 is gaining 0.14%.

The key event of the day is the Bank of England's interest rate decision. Expectations point to a 25 basis point cut to 4.50%.

In the first part of the day, the strongest currency among the G10 currencies remains the Japanese yen. The US dollar is also strong, partially rebounding after yesterday’s sharp decline. The USDJPY pair is down 0.09% today to 152.4200. Meanwhile, the weakest performer is the New Zealand dollar.

U.S. Defense Secretary Pete Hegseth is set to visit Panama in April, his Panamanian counterpart said on Tuesday, with both officials planning to cooperate on strategies to combat illegal migration and drug trafficking.

The Panama Canal Authority denied on Wednesday claims made by the U.S. State Department that U.S. government ships would be allowed to pass through the canal without paying fees. This statement could increase tensions between the U.S. and Panama, following former President Donald Trump's threat to take control of the canal.

Naoki Tamura of the Bank of Japan (BOJ) stated that it is difficult to determine the terminal rate at this moment, emphasizing that the neutral rate does not necessarily have to be 1%. Tamura also explained that there is no fixed pace for interest rate hikes. Despite his previous comments about raising rates to 1% before the end of the fiscal year, he is now signaling flexibility.

U.S. Federal Reserve Vice Chair Philip Jefferson said on Wednesday that he is satisfied with maintaining the central bank’s interest rate at its current level. Jefferson believes that even with a 100 basis point rate cut in the second half of 2024, the Fed's policy remains restrictive and continues to put pressure on reducing inflation.

Gold remains at record-high levels, gaining 0.10% today to 2,870 USD per ounce. Silver is seeing even larger gains, rising 0.15% to 32.30 USD.

In the cryptocurrency market, we are observing a slight rebound following yesterday’s late-day declines. The drop in Bitcoin yesterday was not triggered by a single factor and occurred in a backdrop of gains on Wall Street. This divergence in sentiment yesterday is likely the reason for today’s recovery.

Bitcoin is up 1.60% to 98,100 USD, Ethereum is gaining 1.86% to 2,840 USD, and the total market capitalization of other altcoins is up 2.10% to 890 billion USD.