Emerging market currencies rose and the stock market narrowed its earlier losses as the US dollar fell and sentiment in the US stock market improved, boosting risk appetite.
The MSCI Developing Countries Currency Index closed up 0.1%, with the Colombian peso and the Polish zloty leading the gains. The US dollar fell for the fourth consecutive day after Federal Reserve officials expressed concerns over the health of the US labor market. Driven by the rise of the US stock market, the MSCI stock index reversed its decline, but ultimately fell by 0.1% due to a technical correction at the end of the market.
Read More: Three Federal Reserve officials express new concerns about the US labor market
Greg Lesko, portfolio manager at Deltec Asset Management LLC, said: “A weak dollar and a rebound in the U.S. stock market are benefiting emerging markets. As emerging markets are currently relatively calm, these trends are driven by the United States.
As traders continued to digest expectations of US interest rate cuts, the currencies of most developing countries rose, with those of Latin America and Eastern Europe leading the gains.
Elias Haddad, a strategist at Brown Brothers Harriman, said, “Expectations of the Fed’s accommodative policy and strong global economic activity continue to drive up risky assets.”
However, the Chilean peso was the worst-performing currency, having plunged by 1.4% against the US dollar at one point. Previously, the Central Bank of Chile announced plans to increase international reserves, which came as a surprise to investors. The central bank had repeatedly expressed satisfaction with the current reserve levels.
The MSCI Emerging Markets Equity Index was weighed down by the decline in the share prices of Taiwan’s semiconductor manufacturing companies and Samsung Electronics as US President Donald Trump threatened to raise tariffs on the industry and the investigation into TSMC’s theft of trade secrets panicked investors.
In other respects, the iShares MSCI India ETF once dropped by 1% as Trump signed an executive order imposing an additional 25% tariff on India’s purchase of Russian energy. When the news was released, the rupee had stopped trading. The United States will also impose tariffs on dozens of other trading partners starting from Thursday.
Ukrainian sovereign dollar bonds led the gains among similar bonds in the Bloomberg Emerging Markets Sovereign Total Return Index. Investors are closely watching Russia’s next move in the war against Ukraine, and Moscow is considering making concessions, including suspending air strikes. Meanwhile, Russia has appointed the head of Ukraine’s Economic Security Service to fulfill the requirements of the International Monetary Fund.
Zambia’s sovereign bond prices plunged after the International Monetary Fund warned that Zambia’s ability to repay debts remained weak, undermining bondholders’ hopes for improved terms. The performance of Zambia’s sovereign bonds was worse than that of most similar bonds.
Technical analysis
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Gold: The green buy limit area we provided yesterday performed very tenaciously. Although it was debuffed once, during our evening live stream, the price formed a double bottom structure in the green area and then launched a major rebound (watch the live stream and add the red VX). Within the day, we continue to maintain an active focus on the bulls, attempting a breakout around 3370 and after breaking through the resistance near 3385. For detailed locations, please consult the plugin.
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
Nasdaq: Yesterday, our short positions after the yellow high liquidity scan achieved a profit and loss ratio of 1. Within the day, we will continue to wait for a more definite signal of a downward break to appear before making any operation. For detailed locations, please consult the plugin.
(Nasdaq 15-minute chart
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
Crude oil: Yesterday, our pullback buy in the blue area was able to achieve a 1:1 profit-to-loss ratio effect. Within the day, we will continue to follow the strategy of waiting for the momentum to break through before seizing the bullish signals. Pay attention to the performance near the 66 integer mark within the day. For detailed locations, please consult the plugin.
(Crude oil 15-minute chart
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V: Hana-fgfg and note the message 666
Key financial data and events to focus on today:
The official bank interest rate of the United Kingdom at 19:00
20:30 US seasonally adjusted initial jobless claims for last week (in thousands)(up to 0802)
