Global stocks showed resilience on Tuesday, as investors maintained confidence that the Federal Reserve would not raise interest rates further. This sentiment kept the dollar at three-month lows and supported gold prices above $2,000 per ounce.
Key Economic Data to Shape Expectations for Rate Cuts
Traders will closely monitor the release of economic data this week, particularly regarding the performance of the U.S. economy in the third quarter, consumer inflation, and spending figures. These indicators will play a crucial role in setting expectations for the timing of potential rate cuts.
MSCI All-World Index Indicates Strong Performance
The MSCI All-World index remained unchanged for the day, signaling its best month in three years with an impressive 8.5% increase in November. Similarly, the dollar remained flat at its lowest level in three months, having depreciated by 3.2% against a basket of currencies this month.
European Stocks Experience Decline, US Stock Futures Follow Suit
European stocks witnessed a 0.6% drop, driven by losses in pharmaceutical and consumer goods companies. U.S. stock futures also fell by 0.1%, reflecting the cautious sentiment among traders.
Focus on US Personal Consumption Expenditures and Euro Zone Inflation
This week, investors will closely watch Thursday’s U.S. October personal consumption expenditures report (PCE), including core PCE, considered the Federal Reserve’s preferred measure of inflation, as well as euro zone consumer inflation figures. These reports will provide valuable insights into price trends and monetary policy direction.
Gold Traders Keep Tabs on US Inflation
Gold traders are closely monitoring U.S. inflation numbers, as the price of gold reached a six-month high above $2,000. This surge is attributed to a weaker dollar and lower Treasury yields. Central banks worldwide have emphasized their commitment to maintaining interest rates at levels that curb inflation.
Euro Zone Inflation Data Fuels Discussion in European Markets
Euro zone inflation data this week will fuel ongoing discussions in European markets. ECB President Christine Lagarde stated that the fight against inflation is not over, citing robust wage growth and an uncertain outlook. The market will also focus on Fed Chair Jerome Powell’s speech to gauge future rate expectations.
Benchmark Treasury Yields Edge Up, Japanese Yen Strengthens
Benchmark 10-year Treasury yields increased by 2 basis points to 4.41%, surrendering some gains following Monday’s data showing a larger-than-expected decline in new home sales in October. The Japanese yen, often influenced by U.S. yields, strengthened, causing the dollar to decline by 0.1% to 148.44 yen.
Oil Prices Rise Amid OPEC+ Volatility
Oil prices experienced an uptick due to volatility in the oil market ahead of the OPEC+ meeting. Brent crude rose by 1.1% to $80.83 per barrel, while U.S. crude futures increased by 1.1% to $75.68 per barrel.
European Markets Tumble, Rolls-Royce Gains
European markets started the day with a decline, halting the steady momentum seen throughout the month. The Stoxx 600 fell by 0.6%, with French videogames publisher Ubisoft leading losses and Rolls-Royce gaining 5.5% following its medium-term profit and margin improvement plans.
Asia-Pacific Markets Trade Mixed
Asia-Pacific markets traded in mixed territory after closing in negative territory the previous day. U.S. stock futures were down as November approached its end, with traders reflecting on the strong gains witnessed throughout the month.
In summary, global stocks remained stable as investors anticipated the Federal Reserve’s monetary policy decisions. The focus this week will be on key economic data, including U.S. personal consumption expenditures and euro zone inflation figures. Traders are closely monitoring U.S. inflation numbers and the oil market ahead of the OPEC+ meeting. European markets experienced a decline, while Asia-Pacific markets traded in a mixed fashion. Rolls-Royce announced plans to increase operating profit and improve margins.
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