Thursday 21st March 2024 : Asian Markets Reach New Highs on Fed’s Rate Cut Forecast

Global Markets:

•  Asian Stock Markets : Nikkei up 2.08%, Shanghai Composite up 0.02%, Hang Seng up 2.28% ASX up 2.12%
• Commodities : Gold at $2209.5 (2.26%), Silver at $25.87 (3.13%), Brent Oil at $86.43 (0.52%), WTI Oil at $81.7 (0.59%)
• Rates : US 10-year yield at 4.27, UK 10-year yield at 4.054, Germany 10-year yield at 2.432

News & Data:

• (USD) Federal Funds Rate 5.5% vs 5.5% expected

Markets Update:

On Thursday, Japan’s stock market hit a new all-time high, buoyed by Asian markets following the Federal Reserve’s decision to maintain its forecast for three rate cuts this year. The Fed kept rates steady at 5.25%-5.5% during its latest meeting, with its “dot plot” indicating the expectation of three cuts, though without specifying their timing. The updated dot plot also hinted at three cuts in 2025, one fewer than previously projected.

Asia’s markets soared, with South Korea’s Kospi surging over 2.35% to its highest level since April 2022, and Japan’s Nikkei 225 climbing 2.08% to reach a fresh all-time high. Hong Kong’s Hang Seng index saw a robust gain of 1.74%, while mainland China’s CSI 300 experienced a slight dip of 0.17%. In Australia, the S&P/ASX 200 advanced by 2.12%, supported by positive flash data indicating accelerated business activity in March.

In the U.S., all three major indexes closed higher overnight, with the Dow Jones Industrial Average rallying by 1.03% to finish at 39,512.13 and the S&P 500 gaining 0.89% to close at 5,224.62, surpassing the 5,200 mark for the first time. The Nasdaq Composite also surged by 1.25%, driven primarily by megacap tech stocks.

Overall, the global market sentiment remains optimistic, with investors reacting positively to the Fed’s decision and economic indicators pointing towards continued growth. Japan’s record high and the strong performance across Asian and U.S. markets reflect this upbeat outlook, despite some fluctuations and uncertainties.

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