Spreadex Market Update
Financial Markets React to Policy Signals and Global Developments
Fed Chair Jerome Powell's remarks hint at a higher-for-longer rate stance, significantly impacting stocks, currencies, and investor sentiments.
Key Factors for Today
- Powell's speech sends shockwaves: stocks down, dollar index drops.
- Oil prices witness a surge due to rising tensions in the Middle East.
- Poll: No expected rate cuts by ECB in the near future, Euro strengthens.
- UK Consumer Confidence plummets amid ongoing cost-of-living crisis.
- Netflix announces a price hike following record subscriber growth.
Market Movers
- Dollar index closes lower post Powell's comments.
- Oil prices rebound from a mid-session low of $85.50 to near $90.
- Euro edges up by 0.44% against the dollar.
- UK's pound remains steady, ranging between $1.2090 and $1.2130.
- Netflix's share price surges by 14%, aiming for $420.
Economic Calendar
- GB Retail Sales
- CA Retail Sales
- ECB McCaul Speech
- Fed Harker Speech
- Fed Mester Speech
- Financial Stability Report
- China FDI YoY
The Big News
Federal Reserve's Future Policy and the Market Reaction
Fed Chair Jerome Powell's recent address at the Economic Club of New York highlighted a prospective shift in the Federal Reserve's policy. Indicating a pause this November, Powell hinted that rising long-term yields might substitute the need for further rate hikes. While approaching the matter cautiously, he clarified that current policies are adequately balanced to address inflation. As a result of these insights, the dollar experienced a decline, influenced by investor decisions to shift from the 2-year yield.
Rising Tensions in Yemen and the Impact on Global Prices
The oil market has been tumultuous with prices nearing $90, sparked by reports of missile interceptions in Yemen by Houthi rebels. This geopolitical unrest has eclipsed prior market anxieties stemming from relaxed sanctions on Venezuela. As international reports send mixed signals, global traders find themselves in a quandary, awaiting definitive direction.
Economist Consensus on Future Rate Decisions
Across the Atlantic, a Reuters poll has brought to light a prevailing consensus among economists regarding the European Central Bank (ECB). The majority believe the ECB has concluded its phase of rate hikes, not anticipating any reductions until Q3 2025 at the earliest. This forecast aligns with expectations of inflation meeting the ECB's target around the same time. Amidst these speculations, the Euro has seen a slight appreciation against the dollar, stabilising near the $1.06 threshold.
Record Subscriber Growth and Upcoming Price Changes
On the entertainment front, Netflix announced a triumphant quarter. Concerns about the crackdown on password-sharing were unfounded, as the platform not only remained unaffected but flourished. The introduction of paid sharing was a success, evidenced by an addition of 8.76M subscribers in Q3 alone. Capitalising on this momentum, Netflix intends to revise its subscription rates upwards in certain regions.
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