Morning Wrap (16.08.2024)

U.S. indices closed yesterday with significant gains, supported by strong retail sales data. The largest rebound was observed on the US2000 index, which represents smaller capitalization companies, while technology companies from the US100 index also gained considerably.

Applied Materials (AMAT.US) reported better-than-expected results for the third fiscal quarter after the session closed. The main driver of growth was higher demand for the company’s AI-related products. The semiconductor equipment manufacturer reported that quarterly revenues reached a record $6.78 billion, up 5% compared to the same period last year and exceeding analysts' estimates. Net profit amounted to $1.7 billion or $2.05 per share.

Bullish sentiment on Wall Street translated into a positive session in the Asia-Pacific region. Chinese indices are rising between 1.00-1.20%, while Japan's Nikkei 225 is up 0.50%. Meanwhile, Australia's S&P/ASX200 is trading 0.15% higher. Futures contracts on Singapore’s SG20cash index are gaining 0.65%.

On the other hand, futures contracts for European indices suggest a flat cash session opening without a clear direction. The DAX is up 0.05%, while the UK100 is down 0.10%.

In the forex market, the Australian and New Zealand dollars are among the strongest currencies today, gaining around 0.3-0.5% against the rest of the G10 currencies during the first part of the day. Meanwhile, the U.S. dollar (USD) is retreating after yesterday’s strong rebound. The USDIDX dollar index is down 0.10% today to 102.7000 points.

The gains in the Australian dollar (AUD) are driven by hawkish comments from the Reserve Bank of Australia. Central bank governor Michele Bullock told a parliamentary committee on Friday that although money markets expect a rate cut before the end of the year, the likelihood of that happening is low. Bullock remains concerned about the risk of rising inflation, which has proven to be more resilient than expected.

Republican presidential candidate Donald Trump spoke by phone with Israeli Prime Minister Benjamin Netanyahu on Wednesday and discussed a ceasefire in Gaza and an agreement on the release of hostages. Trump’s campaign did not immediately respond to a request for comment.

In the cryptocurrency market, we are seeing a rebound after yesterday’s late-day declines. Yesterday, the price of Bitcoin briefly fell to around $56,000 due to the liquidation of long positions and over-leveraging in the market. However, at the time of publication, the price managed to recover most of the losses and returned above $58,000.