Wednesday's Markets Update (April 17, 2024)

17 Apr 2024 by rate3

On Wednesday, the mortgage rate hit a 4-month high, and stocks closed lower as Powell's hawkish remarks and mixed earnings reports weighed on the market. The S&P 500 and Dow hit multi-month lows. In the world's markets, aluminum prices spiked on sanctions and major currencies, including the Indonesian rupee, continued to fall as the dollar gained strength. BTC and ETH dipped below their key supports at 60K and 3.0K, respectively. The rest of the crypto market followed suit, cutting prices by up to 4% and causing significant decreases in market caps for major coins such as Polygon, Polkadot, Cardano, Algorand, Cosmos, and Solana, with a 30% drop on a monthly basis. Avalanche and Uniswap depreciated by more than 40% (MoM) in what were the most drastic crypto crashes in the past 6 months.

Details

Mortgage rates reached their highest level (to 7.13%) since early December this week, according to the Mortgage Bankers Association. Rates rose for both regular and jumbo loans. Even with these increases, some borrowers are still applying for mortgages, possibly to lock in a rate before they go even higher. (MBA)

Crypto

DeFi exploded in Q1 2024, surpassing stablecoins in daily transactions and tripling locked-in assets. This surge in users activity (+291% QoQ), dubbed "DeFi Summer part 2," is driving optimism despite regulatory hurdles. (source)

World Markets

South Africa's inflation dipped to 5.3% in March, a relief from recent highs. While some items like food saw price drops, others like education and utilities kept inflation above the target range. The core rate, excluding volatile items, also eased slightly. Overall, prices are rising, but at a slower pace than before. (Stat)
Russia's producer inflation dipped slightly in March (to 19.1% from 19.5%) but remained high, especially for miners (45.8% vs 46.4%) due to rising fuel costs. Overall producer prices rose at the fastest pace in six months. (ROS)

Currencies

The Indonesian rupiah hit a four-year low against the dollar due to rising USA interest rates, Middle East tensions, and a weak Chinese economy. Capital flight and a widening current account deficit are putting further pressure on the currency. Indonesia's central bank is intervening to stabilize the rupiah.

Commodities

Aluminum prices soared to their highest level since early 2023, reaching $2,560 per tonne. This surge is due to sanctions on Russia, a major producer, limiting supply at key exchanges. Concerns about future restrictions and ongoing supply chain issues in China are also contributing to the price increase.