Market Update 06/01/2025

・Last week, the US December ISM Manufacturing Index and Prices Paid Index both exceeded expectations (49.3 vs 48.2 expected and 52.5 vs 51.8 expected), influencing Wall Street to end on a positive note. The Nasdaq closed up 1.8%, the S&P 500 rose 1.2%, and the Dow Jones increased 0.8%. The US 10-year Treasury yield climbed 4 basis points to 4.60%, while oil prices rose 1.2%, closing at $74.10 per barrel. AUD/USD traded within a narrow range of 0.6199/0.6226, ultimately settling at 0.6214.

・Asian stock markets closed mixed last week, with the Hang Seng Index up 0.7%, the CSI 300 down 1.2%, and Australia’s ASX 200 rising 0.6%, while the Nikkei remained closed. The USD/CNH was the biggest mover after the People’s Bank of China suddenly lifted the 7.30 onshore cap that had been maintained since December, causing USD/CNH to rise to a high of 7.3607 and USD/CNY to reach 7.3188. Interestingly, despite the strong correlation between AUD/USD and offshore CNH, there was little reaction to this movement.

・European stock markets opened lower, with the Euro Stoxx 50 down 0.3%, the FTSE 100 flat, and the DAX down 0.3%. The euro and pound retreated from highs of 1.0306 and 1.2417 respectively. USD/JPY encountered resistance below 157.50, while the Canadian dollar weakened further, rising back above 1.4460.