WEEKLY MARKET RECAP
Your weekly global financial market newsletter
WEEKLY MARKET RECAP
Your weekly global financial market newsletter
Major U.S. stock indices posted declines over the week as investors reacted to the Federal Reserve’s hawkish forecasts and increasing U.S. Treasury yields. The S&P 500 Index posted its biggest daily decline in six months on Thursday, leading to its third consecutive week of losses. The STOXX Europe 600 Index in Europe also ended the week down 1.98% as central banks expressed their intentions to maintain high-interest rates, while concerns about higher oil prices and weak business activity data added to economic uncertainty. Major national stock indices such as Germany’s DAX, which fell 2.26%, and the UK’s FTSE 100, which remained relatively stable in local currency due to a weaker UK pound, also posted declines. This currency depreciation benefited the FTSE 100, as it included numerous multinational companies with revenue generated overseas.
US30 -1.89% |
US100 -3.30% |
US500 -2.93% |
GER40 -2.12% |
Oil prices remained steady on Friday but ended the week with slight losses due to profit-taking and the balance between supply concerns caused by Russia’s fuel export ban and concerns about future interest rate hikes. Gold prices closed the week with minimal change, rebounding from a one-week low, as uncertainty loomed over whether the Federal Reserve’s final rate hike of the year would occur in November or December. Weakening global growth concerns also contributed to a modest influx of safe-haven investment in gold. The spot price of gold stood at $1,925.01, reflecting a weekly increase of 0.1%. Analysts noted that for gold to surpass the $2,000 level, a substantial weakening of the dollar would be necessary, contingent on labour market developments.
NATGAS +0.20% |
The U.S. dollar edged up against a basket of currencies on Wednesday following the Federal Reserve’s decision to maintain interest rates but adopted a more hawkish tone, with another rate increase anticipated by year-end. The Fed expects its benchmark overnight interest rate to peak this year in the range of 5.50% to 5.75%, just a quarter-point above the current range. However, the updated projections show a more cautious approach for rate cuts in 2024 compared to previous expectations, reflecting the Fed’s confidence in the economy’s performance and ongoing inflation pressures. The U.S. Dollar Index dipped briefly but ended the session 0.09% higher at 105.21 extending its winning streak fueled by robust U.S. growth.
EUR/USD -0.11% |
USD/JPY +0.37% |
GBP/USD -1.21% |
USD/CAD -0.32% |
Bitcoin’s dominance in the cryptocurrency market has reached its highest point this year, indicating a preference for Bitcoin over altcoins among investors. This rise in dominance is driven by factors such as increased confidence in Bitcoin’s stability, technological advancements, and news events related to Bitcoin. Altcoins, including Ethereum, may face challenges in achieving similar growth amid high Bitcoin dominance, potentially leading to price declines, while factors such as Bitcoin’s rising hash rate and its historical market cycles contribute to this trend.
BTC -0.02% |
ETH -1.98% |
LTCUSD +1.59% |
XMRUSD -2.19% |
UK: The Bank of England’s Monetary Policy Committee voted 5-4 to maintain the key interest rate at 5.25%, marking the first pause in rate hikes since December 2021. BoE Governor Andrew Bailey emphasized the possibility of future rate increases if signs of continued inflationary pressure emerge. This decision followed a recent report showing a slight dip in the UK’s annual inflation rate from 6.8% in July to 6.7% in August, although underlying inflation indicators remained well above the BoE’s 2% target.
EU: European Central Bank (ECB) officials’ remarks about the possibility of another interest rate hike, along with indications from the Federal Reserve that higher rates could continue, led to an increase in Eurozone government bond yields. The Eurozone saw a significant decline in orders, leading to a fourth consecutive month of contraction in private sector output, according to S&P Global Purchasing Managers surveys. The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index, which measures the manufacturing and services sectors, rose to 47.1 in September from 46.7 in August. While the manufacturing sector continued to contract, the services sector also recorded a decline for the second consecutive month.
US: As expected, the Federal Reserve maintained its short-term lending benchmark in the range of 5.25% to 5.50%, in line with the previous meeting’s decision in July. However, the updated Summary of Economic Predictions surprised the markets with a better-than-expected outlook for rates in 2024, and the rate forecast for 2025 also increased. The central bank also revised its growth forecast upward, acknowledging the economy’s resilience, which has exceeded expectations. In addition, weekly initial jobless claims came in lower than expected and reached their lowest level since January, reinforcing the view that the labour market remains robust.
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