Markets across the globe reacted positively last week to news that American Inflation slowed more than anticipated in October, sending stocks and Treasuries soaring. With these numbers, investors believe the Federal Reserve will slow its rate-hiking
campaign that has roiled global markets this year. Japanese Yen Gains On The Dollar Even if the sugar high has worn off, investors are still in a positive frame of mind,sending the MSCI All World stock index up 0.5% on Tuesday to 616.23. At 582, that
was the level just before Thursday’s inflation report.
Dollar Dips Against the Yen
Against the Japanese Yen, the Dollar has been down 0.27 recently to 139.53, barely above Wednesday’s three-month low. The euro rose versus the dollar by 0.64%, reaching a five-month high of $1.059.”There are now two primary forces influencing market activity. There is also rising hope that China will implement more growth-friendly measures. There is also confidence that U.S. inflation data has reached its high, “MUFG currency expert Lee Hardman said.
Concerns have been raised about the high surge in new infections detected in several cities this week. However, Beijing began relaxing some of its tight COVID restrictions last week, including cutting quarantine by two days. The Hang Seng Index in Hong Kong rose by 4.11% throughout the night. Compared to China’s CSI 300, which is up 10% in the same period, this index’s nearly 25% monthly rise is extraordinary.
American And Chinese Presidents met After American President Joe Biden and Chinese President Xi Jinping met for three hours on the margins of the G20 summit in Bali on Monday, the Hong Kong stock market rose. The promise of more regular contact between the two nations was well received by investors.
After three days of advances, the Stoxx 600 index in Europe remained almost unchanged. On the other hand, the futures market for the S&P 500 of leading U.S. stocks showed a gain of 0.63%.Investors were anticipating the release of U.S. producer pricing index (PPI) data later on Tuesday and a speech by Philadelphia Federal President Patrick Harker. Both of these would provide light on Inflation and banking system policy.
PPI May Affect the Market – Analysts Warn
However, analysts warned that a considerable PPI number might negatively affect still-vulnerable markets. As of Tuesday, the yields on the standard 10-year U.S. Treasuries note has dropped to3.867%, a drop of 3 basis points (bps). Since reaching a high of 4.358% somewhere at the end of October, the yield has fallen precipitously.
On Monday, Lael Brainard, the vice chair of the Federal Reserve, sounded optimistic ,saying that although the Fed still has “additional work to do.” Therefore, it is probably prudent to shortly switch to a slow rate” of interest rate rises. According to data released on Tuesday, the unemployment rate in Britain increased in September.
At 1000 GMT, we expected to get statistics on German business confidence. Brent oil fell by roughly 1% to $92 a barrel, indicating that investors are still wary about the state of the global economy. The price of bitcoin increased by 1.1% to $16,769. However, it is still down by over 20% month-over-month. In bankruptcy paperwork made public on Tuesday, the defunct FTX cryptocurrency exchange described a “serious liquidity situation.”