Gold continued to slide during Asian trading on April 23, 2024, dropping below $2,300 with no fresh news as a catalyst. The US is reportedly drafting sanctions that could cut some Chinese banks off from the global financial system due to their involvement in Russia's war on Ukraine. Japan's finance minister Suzuki stated that discussions in Washington laid the groundwork for Japan to take appropriate FX action. The Bank of Japan Governor Ueda reiterated the BOJ's intention to raise its benchmark interest rate if underlying inflation rises toward the 2% target. The US stock market slide is not over, according to JP Morgan's Kolanovic. Vanguard's base scenario is a 'deferred landing' for the US economy with less aggressive Fed cuts. BlackRock's Rieder sees the Federal Reserve being able to lower interest rates twice this year. The Swiss National Bank is being urged to include cryptocurrency in their reserves. Australia's preliminary PMI Manufacturing for April was 49.9 (prior 47.3) and Services was 54.2 (prior 54.4). Japan's preliminary PMI Manufacturing for April was 49.9 (prior 48.2) and Services was 54.6 (prior 54.1).
The University of Michigan consumer sentiment index fell slightly in June. The Bank of Japan plans to reduce bond purchases. Chinese banks extended only ¥950 billion in new loans in May. Car sales in China grew by only 1.5% in May. A drought in northeast China has triggered an emergency response. The UST 10-year yield is at 4.22%. The gold price is up to US$2333/oz. Oil prices remain stable. The NZD is at 61.4 USc. The bitcoin price is at US$65,440. The Fear & Greed index indicates slipping risk appetites [3cbbf651].
The final round of Australian tax cuts have come into effect, benefiting about 11 million earners. The S&P Global/Markit factory PMI for the US reported a rise based on a new order expansion, while the local version from the ISM reported easing new order levels and a small contraction in the sector. In China, the Caixin factory PMI showed business conditions improving the most in over three years. The Chinese central bank has moved to halt the slide in government bond yields. German consumer inflation rate eased in June. Australian dwelling values rose +0.7% nationally in June. The US 10-year Treasury yield is at 4.48%. The price of gold is at US$2329/oz. Oil prices are up. The Kiwi dollar starts today at 60.8 USc. Bitcoin price is at US$63,241.
Global container freight rates are rising to ridiculous levels, stifling world trade. US car sales likely fell to a 15.8 million annualized rate due to a cyberattack on major dealerships. China expects to sell over 30 million vehicles in the year to June, with nearly half as NEVs. The EU will impose tariffs of up to 37.6% on imports of Chinese electric vehicles, costing NZ$6.5 billion in lower trade. Germany's factory orders fell by 1.6% in May, putting them 8.6% lower than the same month last year. Australia's dairy country is facing a sharp squeeze on output due to drought. Canada's real estate sales volumes were down over 15% in June. Global container freight rates continue to rise, with rates from China to Atlantic ports up 10% from last week and rates from China to the US up 5% for the week. The UST 10-year yield is at 4.37%. Gold is unchanged and oil is up. The NZ dollar is at 61.2 US cents and the TWI-5 is at 70.4.
Japanese rubber futures fell on Thursday, tracking weaker crude oil and physical rubber prices. The Osaka Exchange (OSE) rubber contract for December delivery closed down 1.2 yen or 0.36%, at 330.2 yen ($2.05) per kg. The September rubber contract on the Shanghai Futures Exchange (SHFE) fell 135 yuan to 14,910 yuan ($2,050.78) per metric ton. Oil prices fell in Asia on Thursday, with investors turning cautious on expectations of lower demand as US employment and business data came in weaker than forecast, signaling the economy of the world’s top oil consumer may be cooling. Natural rubber often takes direction from oil prices as it competes for market share with synthetic rubber, which is made from crude oil. The price of Thailand’s benchmark export-grade smoked rubber sheet (RSS3) fell by 2.0% to 73.85 Thai baht ($2.02) per kg on a free-on-board basis. The yen edged up 0.12% to 161.53, helped by the dollar’s drop after US economic data continued to point to slowing growth. A stronger yen makes yen-denominated assets less affordable to overseas buyers. China’s BYD opened an electric vehicle plant in Thailand on Thursday, the automaker’s first factory in Southeast Asia, a fast-growing regional EV market where it has become the dominant player.