Morning Wrap (28.06.2024)

Asia-Pacific indices are having a mixed session. Indexes from China slightly recover yesterday's losses gaining between 0.30-1.00%. Japan's Nikkei 225 index loses 0.25% and Australia's S&P/ASX200 falls 0.05%. Singapore SG20cash index futures are also losing 0.20%.

European index futures point to a higher opening of the session on the Old Continent. The UK100 gains 0.15% and the DAX gains 0.05%.

In the forex market, the USD gains relatively strongly in the first part of the day. The USDIDX dollar index is already gaining 0.15% to 105.800 approaching the upper resistance level above 106.00 points. Among the strongest currencies, we can also mention GBP and EUR, which are gaining between 0.1-0.2%.

USDJPY deepens its declines approaching the JPY161 per USD level.

Japan's industrial production report showed a monthly increase of 2.8% to 103.6 in May, beating estimates. On an annual basis, the index rose by 0.3%.

The overall increase was driven by the automobile industry, as carmaker Daihatsu (subsidiary of Toyota) fully resumed operations in early May. Car production for overseas markets also increased across the industry, helped by solid demand for hybrid cars.

Japan's unemployment rate in May remained unchanged at 2.6% from the previous month, in line with expectations.

Consumer inflation in Tokyo rose slightly more than expected in June to 2.3% compared to 2.2% in May. Tokyo's core CPI rose by 2.1%. The reading was higher than expectations of 2.0% after a 1.9% increase in May. 

Japanese Finance Minister Shunichi Suzuki said on Friday that the authorities are "deeply concerned" about the impact of the USDJPY pair's dynamic movements on the economy. Speaking at a regular press conference, Suzuki said the authorities would respond appropriately to excessive currency movements and that confidence in the Japanese currency would be maintained.

Today marked the first debate ahead of the US presidential election in November. US President Joe Biden and former President Donald Trump clearly argued about topics such as the US economy, foreign affairs, abortion rights, and migration across the Mexican border into the US.

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Thursday that the US Federal Reserve should keep interest rates unchanged until the end of this year.

Georgieva said the US economy had been supported by "labour supply and productivity growth" during the Fed's unprecedented and aggressive monetary tightening cycle in recent years. However, the US government's budget deficit and rising debt pose "significant risks" to the global economy, worsening the excellent economic performance.

Sentiment remains mixed in the cryptocurrency market. Bitcoin is losing 0.20% today and is still in the region of $61500.