Thursday 19th December 2024: Global Markets Slide Amid Fed Rate Cuts and Economic Uncertainty

Global Markets:

•  Asian Stock Markets : Nikkei down 0.7%, Shanghai Composite down 0.31%, Hang Seng down 0.74% ASX down 1.78%
• Commodities : Gold at $2621.35 (-1.24%), Silver at $29.84 (-2.38%), Brent Oil at $72.9 (-0.56%), WTI Oil at $69.4 (-1.39%)
• Rates : US 10-year yield at 4.526, UK 10-year yield at 4.5575, Germany 10-year yield at 2.2410

News & Data:

• (USD) Federal Funds Rate  4.5% vs 4.5% expected
• (USD) Building Permits 1.51M vs 1.43M expected

Markets Update:

Asia-Pacific stocks and currencies declined Thursday amid a global market sell-off following the U.S. Federal Reserve’s third consecutive rate cut and its indication of fewer cuts ahead. The Bank of Japan maintained its policy rate at 0.25% for the third consecutive meeting, leading to a weakened yen, which dropped to 155.40 against the dollar from 154.60 pre-announcement. The Nikkei 225 narrowed its losses to 0.63% from 0.96%, while the Topix fell 0.49%.

In South Korea, the Kospi and Kosdaq indices both declined by 1.65%, with the won trading near its weakest level since March 2009 at 1,450.46 per dollar. Australia’s S&P/ASX 200 dropped 1.96%, while Hong Kong’s Hang Seng index fell 0.88%, and China’s CSI 300 slid 0.62%. Hong Kong’s Monetary Authority reduced interest rates by 25 basis points, mirroring the Fed’s move, as its currency is tightly pegged to the U.S. dollar.

Meanwhile, New Zealand officially entered a recession, with GDP falling 1% in the September quarter, marking two consecutive quarters of decline.

Overnight in the U.S., the Dow Jones dropped 1,123.03 points, or 2.58%, to 42,326.87, marking its first 10-day losing streak since 1974. The S&P 500 fell 2.95% to 5,872.16, and the Nasdaq Composite declined 3.56% to 19,392.69. The sell-off followed the Fed’s anticipated 25-basis-point rate cut to a target range of 4.25%-4.5%, with a forecast of only two rate cuts in 2025, fewer than the four previously projected.

Upcoming Events: 

• 01:30 PM GMT – USD Final GDP q/q
• 01:30 PM GMT – USD Unemployment Claims

The post Thursday 19th December 2024: Global Markets Slide Amid Fed Rate Cuts and Economic Uncertainty first appeared on IC Markets | Official Blog.