Spreadex Market Update
Global Economic Worries Impact Financial Markets
Disappointing Services PMIs Raise Concerns
Both European and US Services PMIs fell short of expectations, suggesting a potential slowdown in economic growth. The European Services PMI dropped from the anticipated 55.9 to 55.1, while the US figure hit a five-month low of 50.3, significantly lower than the expected 52.5. The decline was reflected in the business activity index, which reached 51.5, compared to the previous reading of 52.0. Additionally, new orders and prices paid components showed significant drops, while inventories reached their highest level since February 2021.
Evaluating Global Economic Data
Traders analysed the disappointing economic data from various regions, leading to increased risk aversion. The poor Services PMI figures, coupled with concerns about global economic weakness, prompted investors to seek safe-haven assets such as gold. Despite the gains observed during a relatively quiet session, gold remained below the $2,000 mark, facing resistance at $1,975 per ounce and support at $1,940.
RBA Surprises with Rate Hike
Contrary to expectations, the Reserve Bank of Australia (RBA) raised rates by 25 basis points, surpassing analysts' predictions. The RBA cited persistently high inflation levels and the need to provide confidence that inflation will decrease towards the target range. Moreover, the central bank hinted at the possibility of further tightening measures. As a result, the Australian dollar (AUD) rallied, attempting to break through the 67-cent threshold.
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