Spreadex Market Update
Financial Markets Reach New Heights Amid Varied Economic Signals
The Big News
Gold's Descent Amid Risk Rally
The recent New York Fed survey indicates a decline in US consumer inflation expectations, now at 3.4%, the lowest since April 2021. This forecast supports the Federal Reserve's decision to hold rates steady. However, bond investors remain cautious, anticipating resistance to early rate cuts. Gold, typically a safe-haven asset, dipped over 1%, losing its $2000 benchmark amid a surge in riskier investments.
Yen's Slide as BOJ Maintains Stance
The Bank of Japan continues to defend its ultra-loose monetary policy, despite expectations of rising short-term borrowing costs. This stance led to the Yen's over 1% fall against the dollar, although it later recovered slightly, closing at 146.15. The slowdown in Japan's wholesale inflation to 0.3% in November further supports the BOJ's policy, reinforcing the Yen's weaker position.
Oil Prices Waver After Tanker Attack ~
Oil prices experienced a slight uptick due to concerns about supply disruptions following an attack on a US chemical tanker. This incident led to fears of further geopolitical tensions. Despite this, crude oil prices showed only modest gains, remaining above the critical $70 per barrel mark. The COP28 climate summit's draft proposal, calling for reduced fossil fuel consumption, adds another layer of complexity to the oil market dynamics.
Yuan's Dip Amid Deepening Deflation
The Chinese Yuan hit a three-week low, driven by worsening deflation and weakening domestic demand. Consumer and producer prices in China fell sharply, recording their fastest decline in years. This economic backdrop has heightened calls for additional stimulus measures to spur growth.
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