Morning Wrap (21.05.2024)

Asia-Pacific indices are recording a downward session. China's indices are losing the most, down around 0.85-1.20%. Japan's Nikkei 225 index is trading 0.45% down, Singapore's SG20cash index is trading 0.10% lower and Australia's S&P/ASX200 is gaining -0.13%.

European index futures also point to the opening of the cash session on a slight downside. The DAX and UK100 index contracts are losing around 0.15-0.30%.

In the forex market, movements are quite moderate in the first part of the day. One of the stronger currencies is the EUR and GBP, but the increases are limited to around 0.10-0.20%. On the other side, among the weakest currencies are the JPY losing around 0.2-0.3%. The USDJPY pair is gaining 0.14% to 156,400.

AUD is attempting to return to gains today following the publication of the minutes of the latest RBA meeting, in which it was revealed that the Reserve Bank of Australia was considering an interest rate hike at its May meeting.

In April, the RBA left its official target cash rate unchanged at 4.35%. However, the minutes showed that policymakers were considering a rate hike amid concerns that inflation was falling too slowly.

According to the BOJ's corporate survey, Japanese manufacturers prefer the Bank of Japan to prioritise stable exchange rates over seeking to stabilise inflation and economic growth.

Cryptocurrencies are consolidating at their highest levels since the first half of April. Bitcoin by the end of yesterday was gaining more than 6% even returning temporarily above the $71,000 level. The increases seen on Ethereum were even more impressive. ETH broke through the $3700 level gaining almost 20%.

The catalyst for the surge has been progress in the approval process for spot Ethereum ETFs, with a deadline of 23 and 24 May for applications from VanEck and Ark 21Shares respectively.

Exchanges are being asked to update 19b-4 filings on an accelerated basis by the US Securities and Exchange Commission, three people familiar with the situation told CoinDesk, suggesting they may be looking to approve these applications before a key deadline this Thursday.

Yesterday, analysts at Bloomberg upgraded the odds of spot ETF approval from 25% to 75% following the latest news to hit the market.