Morning Wrap (23.05.2024)

Indices from Asia and the Pacific are experiencing a mixed session. The biggest gains are seen in Japan's Nikkei 225 (+0.90%), Australia's S&P/ASX200 (+0.50%), and Singapore's SG20 (+0.45%). Indices from China declines by about 0.60-0.80%.

Futures contracts for European indices indicate a slightly higher opening of the cash session. UK100 futures are up about 0.10%, and the German DAX index is up 0.40% to 18,800 points.

Futures on US indices are also gaining after yesterday's Nvidia results, which were announced just after the close of the cash session. US100 futures are setting new all-time highs at 18,950, gaining 0.70%, while US500 futures are up 0.50% to 5,350 points, also recording new historical highs.

Nvidia not only met expectations but exceeded them and raised forecasts for future quarters. In after-hours trading, Nvidia's stock price increased by as much as +6.00% to $1,007 per share.

Nvidia reported revenues of $26.04 billion (+260% year-over-year), which is 5% higher than projected. This represents a year-over-year growth rate of 262%. Among the segments, the Data Center segment continues to perform best, growing to $22.56 billion and beating market expectations by 6.78%.

In the forex market, the largest moves in the first part of the day can be seen again in the New Zealand dollar, which is extending yesterday's gains following the RBNZ decision. On the other hand, one of the weakest currencies is the Japanese yen (JPY).

The Japanese manufacturing PMI increased in May to 50.5 from 49.6 previously, exceeding expectations of 49.7 and signaling an improvement in business conditions for the first time in a year. However, the services PMI fell from 54.3 to 53.6.

Jingyi Pan, Director of Economics at S&P Global Market Intelligence, noted that the expansion of Japan's private sector accelerated for the third month in a row, reaching the fastest pace since August 2023. This suggests continued growth momentum in the middle of the second quarter, indicating a better GDP reading after disappointing results for the first quarter.

The preliminary reading of the Australian manufacturing PMI remained unchanged at 49.6 in May from 49.6 in April. However, the services PMI fell in May to 53.1 from the previous reading of 53.6.

The Australian economy continues to report strong readings, with private sector activity increasing for the fourth month in a row.

In a speech on Thursday before the release of the government budget and fiscal forecasts on May 30, Finance Minister Nicola Willis said the government expects New Zealand's deficit to worsen in the coming year due to deteriorating economic prospects.

In the cryptocurrency market, we observe a slight rebound supported by Nvidia's good results. However, investors are held back from further gains by the expected publication of the SEC's decision on Ethereum spot ETFs, which will likely determine the direction for the coming days.