Positive Start to the Week in Global Markets
Global Markets Maintain Positive Momentum as Risk Appetite Continues
The global markets are experiencing a positive trend as risk appetite continues to prevail following last week’s macroeconomic data from the USA and the interest rate cut decision by the European Central Bank (ECB). Analysts are closely monitoring the developments in the US and Chinese economies, as well as geopolitical risks arising from the Middle East, to determine the direction of global markets.
In the US, expectations for a “soft landing” of the economy remain strong, but concentrated company balance sheets are increasing stock and sector-based volatility. Finance ministers and central bank governors from around the world are set to meet in Washington for the annual meeting of the International Monetary Fund (IMF) and the World Bank, where the news flow from this meeting could impact market direction.
Meanwhile, the US saw a decrease in new housing starts by 0.5 percent in September, while construction permits issued decreased by 2.9 percent on a monthly basis. Atlanta Fed President Raphael Bostic stated that the Fed will be patient in lowering interest rates to ensure inflation does not exceed the 2 percent target.
On the corporate side, Netflix’s shares saw an increase of over 11 percent after exceeding profit expectations. It is widely expected that the Fed will reduce the policy rate by 25 basis points next month and make a total reduction of 50 basis points by the end of the year.
In the bond markets, a horizontal trend persists, with the US 10-year bond interest rate currently at 4.08 percent. The dollar index started the week at 103.5, while the price of gold reached a record high of $2,732.9 and silver tested its highest level since November 2012 at $34.11.
In Europe, positive trends were observed in stock markets, except for the UK, with retail sales in the UK surpassing expectations and construction production in the Eurozone seeing a slight increase in August. Economic growth expectations for the eurozone next year were revised downwards, with confidence that inflation will drop to the ECB’s targeted level increasing.
Asian markets are also experiencing a buying-oriented trend, except for Hong Kong, due to the positive effects of China’s reduction in loan interest rates. The decision aims to stimulate the real estate and credit markets and ease the burden on individuals and businesses.
Overall, global markets are maintaining a positive momentum fueled by various factors, including macroeconomic data, geopolitical risks, and central bank policies. Investors are closely monitoring these developments to make informed decisions in the ever-changing global market landscape.
