Ahead of potentially market-moving inflation data from the United States and Europe later this week and an oil producers’ meeting that might stop or prolong the recent price decline, Asian shares fell on Monday.
Gold was one of the big movers, rising to $2,009 an ounce and briefly reaching a six-month high of $2,017.82. Due to the substantial gains that investors are sitting on, the approaching month-end may also prompt some caution. Despite easing by 0.3%, Japan’s Nikkei (.N225) is still up 8.6% for the month of November.
With a 0.3% decline, MSCI’s broadest index of Asia-Pacific shares outside of Japan (.MIAPJ0000PUS) saw a 6.4% monthly gain. With the market down 2% so far in November, Chinese blue chips (.CSI300) lost an additional 1.1% and missed out on all the global celebrations.
The central banks of China made a vague announcement that they would encourage financial institutions to lend support to private businesses. FTSE futures decreased by 0.1%, while EURO STOXX 50 futures eased by 0.2%.
Nasdaq futures dropped 0.4%, while S&P 500 futures eased by 0.2%. The S&P 500 cash index is up 8.7% for the month and has been rising for the past four weeks, marking its best performance since mid-2022.
Thursday’s release of the Federal Reserve’s preferred inflation gauge is anticipated to show a decline to levels not seen since mid-2021, supporting market bets that rates will drop in the near future. At a Fireside Chat on Friday, Fed Chair Jerome Powell will have an opportunity to counter the doves, and this week at least seven other Fed speakers are scheduled.
Bruce Kasman, head of global economics at JPMorgan, says, “A view we hold strongly is that central banks are unlikely to deliver easing in the first half of 2024 absent a threat to the expansion or financial stability. Indeed, this message of patience is likely to be notable in upcoming DM policy communications in response to recent financial market developments.”
Emphasizing her cautious tone, ECB President Christine Lagarde will reaffirm her position at the EU parliament on Monday. Rate cuts are anticipated if the anticipated data on EU consumer prices for November shows a slowdown.
Based on market indicators, the ECB will hike rates by 82 basis points and the US will ease policy by 80 basis points in the upcoming year. The result has been a significant bond rally, which has caused the 10-year Treasury yield to drop 36 basis points to 4.50% this month. Consequently, the euro is closing in on a four-month high at $1.0940, and the dollar has dropped by 3% versus major currencies.
As reports indicate producer disagreements, the oil market is uncertain ahead of an OPEC+ meeting on November 30, which could affect prices. Due to concerns in the market, both Brent and U.S. crude dropped to $80.27 and $75.23 per barrel, respectively.
- Published By Team Genuine Reporter