Global Markets Take a Cautious Stance Ahead of Pivotal Week
As the week begins, financial markets are adopting a cautious approach, with currencies taking center stage. The upcoming U.S. presidential election, set to take place on Tuesday, is expected to be a nail-biter, with Democratic candidate Kamala Harris and Republican candidate Donald Trump virtually tied in opinion polls.
Currency Markets in Focus
The U.S. dollar has taken a hit, falling 0.75% against the yen to 151.82, while the euro has jumped 0.62% to $1.0901. The Australian dollar has risen 0.76%, and China’s yuan has gained 0.46% in the onshore market. Analysts attribute the dollar’s decline to a shift in sentiment, with the probability of a Republican sweep decreasing from 48% to 36% according to Polymarket.
Central Banks Take Center Stage
This week, investors will be closely watching a slew of central bank meetings, including the Federal Reserve, the Bank of England, the Reserve Bank of Australia, Riksbank, and Norges Bank. The Fed is expected to cut interest rates by 25 basis points, while the BoE may also ease rates despite a recent sell-off in gilts.
China’s Stimulus Measures in the Spotlight
China’s National People’s Congress standing committee meeting, set to take place from November 4 to 8, will be closely watched for further details on a raft of stimulus measures announced recently. The country is considering approving the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt to revive its fragile economy.
Global Stocks and Commodities
MSCI’s broadest index of Asia-Pacific shares outside Japan has risen 0.6%, recovering from its fall to a five-week low on Friday. U.S. stock futures have reversed early losses to trade higher, with Nasdaq futures rising 0.42% and S&P 500 futures gaining 0.27%. In commodities, oil prices have risen more than $1 after OPEC+ announced it would delay a planned December output hike by one month. Spot gold has ticked 0.12% higher to $2,738.49 an ounce.
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