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Markets Update: The Trump administration intensifies trade actions, causing US yields to rise. The US dollar reaches a one-year high against the euro and a three-month peak against the yen. Market participants are monitoring inflation data for indications on the pace of potential Federal Reserve interest rate cuts. Concerns over the trade war are putting pressure on crude oil and metals.
Global Markets Roundup: 13 November 2024
FESX1! | Z1! | NI225 | NQ1! | ES1! | EURUSD | USDJPY | DXY | GOLD | CL1! | ZC1! | ZS1! HG1!
Global stocks declined for the second consecutive day on Wednesday due to the recent increase in U.S. Treasury yields, as investors awaited inflation data that could impact Federal Reserve policy decisions. The MSCI's all-country world index (EURONEXT:IACWI) dropped by 0.17%, with European shares (SXXP) slightly lower following a 2% loss the previous day, while Asian markets (MIAPJ0000PUS) also saw a decrease. U.S. stock futures showed a slight decline as well, following a day where major U.S. benchmarks closed lower. The surge in U.S. Treasury yields on Tuesday, with the 10-year yield (US10Y) rising by 12 basis points and the two-year yield (US2YT=RR) reaching its highest level since late July, affected market sentiment. Yields stabilized on Wednesday, with the 10-year yield at 4.43% and the two-year yield at 4.35%.
Since Donald Trump's re-election to the White House last week, bond yields have surged due to expectations of lower taxes and higher tariffs leading to increased government borrowing and a rise in the fiscal deficit. Investors view Trump's proposed policies as stimulating economic growth and inflation, which could hinder efforts to lower Fed interest rates. Analysts predict further developments as Republicans are close to securing a majority in the House of Representatives, potentially gaining full control of Congress. Currently, traders estimate a 62% chance of the Fed reducing rates by a quarter point on Dec. 18 after its upcoming policy meeting, down from 77% a week ago. The odds may decrease further with the release of the U.S. consumer price index (CPI) report at 1330 GMT, where economists anticipate a 0.3% monthly increase in the core gauge.
In the foreign exchange markets, the dollar DXYÂ is currently at a six-month high against major currencies, supported by higher Treasury yields. The euro EURUSDÂ is trading at $1.0601, a 0.1% decrease compared to the previous day and close to its lowest level in a year. The Japanese yen is also weaker at 155 per dollar, approaching a point where Japanese authorities may intervene to prevent further depreciation. The People's Bank of China has raised the yuan from a three-month low against the dollar by issuing a stronger than anticipated official exchange rate, indicating concerns about the recent sharp decline in the currency. EURUSDÂ | USDJPY | AUDUSD | DXY | NZDUSD
Commodities remained pressured by the dollar's strength and as traders worried about the outlook for key consumer China, which stands to bear the brunt of Trump's threatened trade tariffs. Stimulus announcements from Beijing so far have failed to stir much optimism over an economic revival. Copper prices hit a two month low of $9,094, a drop of more than 6% since the U.S. presidential election last week. Crude oil rebounded a touch after hitting to its lowest in two weeks on Tuesday after OPEC cut its forecast for global oil demand growth this year and next, highlighting weakness in China and some other regions. Brent BRN1! futures added 0.7% to $72.38 a barrel, while U.S. West Texas Intermediate (WTI) crude CL1! rose 0.5% to $68.48. Gold GOLD rose 0.3% to $2,605 per ounce, following its slump to a nearly two-month low of $2,589.59 in the previous session, pressured by dollar strength.. BRN1! | CL1! | GOLD | HG1! | KC1! | RC1! | CC1!
Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team