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Brent fell to $78.40 per barrel

On Tuesday morning, oil prices continued to decline moderately after a sharp drop the day before. The current price of Brent oil is $78.36 per barrel, North American WTI oil is trading near $75.08. In yesterday's session, both brands ended in the red for the third week in a row.

Analysts note that oil prices have declined due to concerns about demand in China, the world's largest oil importer. Markets were shaken by a series of negative economic news from China: manufacturing activity in the country probably declined for the third month in a row in July.

The market's attention is also focused on the upcoming meeting of the Chinese Politburo, where decisions can be made on further support for economic policy. However, expectations from this event are low, as the Third Plenum, a key political meeting in mid-July, mostly confirmed current economic goals and failed to improve market sentiment.

In addition, oil fell by 2% after Israel announced that its response to Hezbollah's missile strike on the occupied Golan Heights would be thought out in such a way as to avoid dragging the Middle East into a full-scale conflict.

It also became known that weekly oil supplies from Russia fell to the lowest level since the invasion of Ukraine in 2022.

Tomorrow, you should pay attention to the publication of the report of the US Department of Energy. It is expected that it will show a reduction in oil reserves in the country by 3.9 million barrels. And if the reduction is greater than expected, it may support oil prices. On Monday, the US Department of Energy announced the purchase of 4.56 million barrels of oil for the strategic reserve.
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World demand for gold decreased by 6%

In the second quarter of 2024, global demand for gold (excluding OTC transactions) decreased by 6% compared to the same period last year, reaching 929 tons, according to the World Gold Council (WGC).

The drop in demand for jewelry was the main reason for the decline: demand fell by 19% to 391 tons, and demand from the jewelry industry decreased by 17% to 411 tons.

However, the decline in the jewelry market was partially offset by an increase in demand in other sectors. In particular, the technology sector showed an impressive 11% increase in gold consumption, to 81 tons, due to the use of gold in electronics, especially in chips for the rapidly developing field of artificial intelligence.

Central banks, seeking to protect and diversify their reserves, increased gold purchases by 6%, to 183 tons.

The supply of gold on the market increased by 4%, to 1,258 tons. Production turned out to be a record for the second quarter — 929 tons.

The oversupply of 329 tons was absorbed by the OTC market, which played a significant role in maintaining gold prices. Together with the demand from central banks, the OTC market has become a key driver of gold price growth.
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Oil prices are rising on concerns about the conflict between Israel and Hamas

Oil prices rose during Asian trading on Thursday, continuing the sharp rise of the previous session. The escalation of tensions in the Middle East following the assassination of the Hamas leader in Iran has increased fears of a possible large-scale war in the region.

The oil market is reacting to an increase in risk premiums related to fears of revenge by Hamas for the assassination of the organization's leader Ismail Haniyeh in Tehran on Wednesday. Although Israel has not claimed responsibility for the attack, many believe Jerusalem is behind the attack. The rising tensions have raised fears that a full-scale war in the Middle East could disrupt oil supplies from the region, which in turn could affect global markets.

Traders' attention is also focused on today's OPEC+ meeting, where information about oil production plans may be disclosed. According to media reports, no changes in the cartel's production volumes are expected, despite the recent decline in oil prices to almost two-month lows. Nevertheless, leading producers such as Saudi Arabia and Russia are likely to remain cautious about further production cuts.

The current price of Brent oil is $81.60 per barrel. North American WTI oil is trading near $78.60. Oil quotes also received support after the publication of data on a significant decrease in oil reserves in the United States for the fifth week in a row, due to high demand for fuel during the summer period of active travel.
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Bitcoin and Ether collapsed amid global economic concerns

On Monday, there was a sharp drop in the value of bitcoin amid a large-scale sale of high-risk assets.

According to CoinDesk, by noon Moscow time, the Bitcoin exchange rate had decreased by 10.8%, reaching $52,827. Over the past week, the cryptocurrency has lost more than a fifth of its value, although it has still shown an increase of almost 26% since the beginning of the year.

Ethereum is also experiencing a significant drop, dropping 15.3% to $2,330, which is the biggest decline since 2021.

The Japanese stock market posted a record 12.4% drop, the highest since 1987. Futures for the US Nasdaq Composite index are also down 4.2%.

The reason for the massive sell-off of risky assets was growing concerns about a possible recession in the United States after the publication of disappointing economic data last week. Goldman Sachs analysts have increased the probability of an economic downturn in the United States in the coming year from 15% to 25%. Markets also expect that the Federal Reserve may hold an unscheduled meeting this week and cut the key rate by 0.25 percentage points with a 60% probability.
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Gold is moving away from highs amid the growth of the stock market

The price of gold fell from near record levels during Asian trading on Tuesday. The recovery of stock markets led to a decrease in demand for reliable assets, although instability in the markets still supported relatively high prices for the precious metal.

Yesterday, gold soared to a historic high due to the collapse of stock markets caused by fears of a recession in the United States and expectations of lower interest rates.

December gold futures fell 0.3% to $2402.57 per ounce. At the beginning of the week, the spot price reached $2,460 per ounce.

On Tuesday, gold weakened slightly amid the strengthening of the dollar and the growth of the stock market. Nevertheless, gold has maintained much of its recent growth as the prospect of lower interest rates continues to support interest in it.

The rise in gold prices has led to an increase in prices for other precious metals, but in recent sessions they have suffered significant losses, since their attractiveness as a "safe" asset is inferior to gold.

Silver futures fell 0.7% to $27.020 per ounce, and platinum futures fell to $918.85 per ounce. Copper prices fell 0.6% to $8,806.50 per tonne, and one-month futures fell almost 1% to $3,9660 per pound.
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Brent rose above $77 per barrel

Oil prices continued to rise on Wednesday, following a slight increase in the previous session.

On the London ICE Futures exchange, October futures for Brent crude oil rose in price to the level of $77.25 per barrel. September WTI crude futures rose to $73.71 per barrel.

Traders continue to monitor the situation in the Middle East, anticipating a possible Iranian attack on Israel after the recent assassination of Hamas leader Ismail Haniyeh in Tehran.

«If the situation in the Middle East worsens and this affects oil supplies from the region, prices will quickly go up,» said Commerzbank analyst Carsten Fritsch.

Traders are also concerned about the prospects for oil demand due to signals of slowing economic growth in China and the United States. Statistics released on Wednesday showed a slowdown in Chinese growth in July amid a larger-than-expected increase in imports.

Also today, the U.S. Department of Energy will present a weekly report on energy reserves. According to the American Petroleum Institute, published yesterday, oil reserves in the United States increased by 180 thousand barrels.
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European stocks are losing ground amid uncertainty

European stocks resumed their decline after two days of gains, under pressure from mixed earnings reports and uncertainty about the economic development of the United States.

The iShares STOXX Europe 600 index fell 0.9%, rolling back from last Wednesday, which was the best day for the index since November. Real estate and technology stocks were under the most pressure, while telecommunications stocks rose slightly.

Siemens AG lost ground after forecasting revenue and profit growth below expectations, Zurich Insurance Group AG declined due to increased losses in the property insurance division. Among the leaders of the day were Enter PLC, which raised its forecast for the full year, and Allianz SE, which posted higher profit figures.

The beginning of August was unstable for European stocks due to concerns about the recession in the United States. Despite this, the overall picture of profit reporting looks relatively optimistic: earnings per share growth for the MSCI Europe index is 2.4%, higher than the forecast of 0.4%.

Despite the fact that experts do not expect sharp drops in the market, they advise investors to be careful due to geopolitical instability. Technical analysis indicates the possibility of short-term growth in European stocks, but trading will remain volatile until economic data signals a "soft landing" of the US economy.
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Brent rose above $80 per barrel

Oil prices have been rising for the fifth consecutive auction due to concerns about possible supply disruptions amid the escalation of the conflict in the Middle East.

Barbara Lambrecht, commodity analyst at Commerzbank, noted that geopolitical tensions could intensify at any moment, which would put additional pressure on price growth. Geopolitical risks are likely to remain a key factor influencing oil price trends.

The data published last week in the United States turned out to be better than forecasts, which reduced concerns about a possible recession in the country's economy. These data reinforced traders' confidence that the Federal Reserve could cut interest rates as early as next month, which in turn could boost fuel demand.

The current price of Brent crude oil is $80.30 per barrel. North American WTI oil is trading near the level of $77.70. Over the past week, Brent has risen by 3.7%, and WTI — by 4.5%, ending the first of five weeks in the «plus».
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German companies continue to invest in China

German companies continue to invest heavily in China, despite government calls to diversify risks. According to the Bundesbank, Germany's direct investments in China in the first half of 2023 reached 7.3 billion euros, which is almost one and a half times more than in the whole of 2022.

Experts note that a significant part of investments is directed to reinvest profits earned in China. Last year, German businesses reinvested more than half of the 19 billion euros of profits earned in China.

Localization of production in China is becoming an increasingly popular strategy for German companies seeking to reduce risks in their supply chains. However, this strategy could have a negative impact on the German economy by reducing exports and creating dependence on the Chinese labor market.

The German government recommends that companies diversify their investments and sales markets, but does not call for a complete cessation of cooperation with China.

Despite this, major automakers such as Volkswagen and BMW continue to invest heavily in China. In the last five years, Germany has been the leader in terms of EU investments in China, which indicates the continued attractiveness of the Chinese market for German businesses.
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JPMorgan: EM shares will benefit from the slowdown in the US economy

JPMorgan forecasts favorable prospects for emerging market (EM) stocks amid an expected slowdown in U.S. economic growth and lower interest rates in the second half of 2024. Analysts believe that these factors will have a positive impact on the comparative performance of EM shares due to differences in growth rates and interest rates.

Experts believe that adjusting expectations regarding rates and growth in the United States will lead to a higher valuation of EM shares in global investment strategies. However, they warn of risks, including economic downturns, market instability and the impact of the upcoming U.S. elections on international trade and investment risks.

The growth gap between EM countries and developed markets (DM) is expected to widen to 2.7% in 2024, compared with 2.5% in 2023. The Fed's rate cut may create opportunities for monetary policy easing in the EM.

Other factors boosting the attractiveness of EM stocks include limited investments in the sector, attractive prices, diversification strategies from U.S. stocks, and a weakening U.S. dollar.

The historically slowing but resilient U.S. economy is favorable for EM stocks. During periods of Fed rate cuts, EM stocks usually perform better: the average decline is 11% for EM, 15% for DM and 13% for the US.
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The yuan is rising amid a weakening dollar

On Monday, the yuan showed the most significant growth in two weeks, reaching 7.1363 per dollar, which is 0.4% higher than the previous day. This increase, the largest since the beginning of August, is due to the weakening of the dollar and expectations of lower interest rates in the United States.

However, the yuan lost ground against the resurgent yen, falling 1% to 20.38 yen, which was the strongest drop since August 5. As a result, the yuan fell to 98.07 against a basket of trading partner currencies, the lowest level since January 15.

Traders are waiting for the announcement of the base rate on loans in China on Tuesday. The collapse of bank lending, falling housing prices and gloomy economic sentiment, according to analysts, will not allow the currency to grow significantly further.

The yield on 10-year Chinese government bonds fell by 1.8 basis points to 2.17%, while the yield on similar benchmark U.S. government debt was 3.9%.

The 7-day repo rate for the yuan in the domestic market was 1.74%, and in the futures market, the 3-month yuan was quoted at 7.0695, 722 points higher than the spot rate. Three-month forward contracts on CNH were trading at 7.0682 per dollar. The People's Bank of China has set the average rate around which the yuan can trade in the 2% range at 7.1415 per dollar.
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S&P 500: the forecast for 5600 points remains

Analysts maintained an optimistic outlook for the S&P 500 index, expecting it to rise to 5600 points by the end of the year. The strong result of the second quarter, when the profits of S&P 500 companies increased by 10.5% year-on-year, exceeding the forecast of 8.1%, became the basis for such a positive attitude.

Seven major technology companies contributed significantly to this growth, increasing earnings per share by 38%. It is important to note that the remaining 493 S&P 500 companies also showed positive profit growth, which is the first time in the last six quarters.

Despite the good performance, profit growth forecasts for the second half of the year were slightly adjusted down to 10% y/y. Analysts note the risks to the market, in particular, rising unemployment and the likelihood of a recession.

Nevertheless, they believe that reducing the dependence of the index's income on cyclical sectors may provide some stability. The consensus forecast for earnings per share (EPS) for 2024 coincides with analysts' estimate of $250, which supports the target for the S&P 500 at the end of the year.

Analysts have expressed doubts about the ambitious forecast for profit growth of 15% in 2025, offering a more cautious forecast in the area of high single-digit percentage growth rates. Despite these considerations, analysts remain positive about the market and confirm their year-end S&P 500 target at 5,600.
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Chinese banks have increased assets by 7%

According to Xiao Yuanqi, Deputy head of the State Administration for Financial Supervision and Control of the People's Republic of China, the total assets of the Chinese banking sector at the end of July amounted to 423.8 trillion yuan ($59.4 billion), an increase of 7% compared to the same period last year.

Positive trends are also observed in the field of credit quality: the share of non-performing loans decreased by 8 basis points to 1.61%.

The equity capital adequacy ratio of banks in the first half of the year reached 15.53%, which indicates the high strength of the industry and its ability to withstand risks, Xinhua news agency reports.

Xiao Yuan qi stressed that the GUF will continue to support banks in optimizing the structure of assets and liabilities, as well as in finding new sources of profit growth to increase profitability.
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Powell's performance was a turning point for gold

The gold market is once again reaching record highs, exceeding the mark of $2,560 per ounce. This upward movement in the market was provoked by a speech by Fed Chairman Jerome Powell in Jackson Hole, where he made it clear that the Fed is ready to lower interest rates.

Lower Treasury bond yields, a weaker dollar and increased investment in exchange-traded funds investing in gold (ETFs) create a favorable environment for gold prices to rise. These factors, which previously inhibited the growth of the value of gold, can now become a powerful incentive for it.

Jay Hatfield, chief executive officer of Infrastructure Capital Advisors, notes that the expectation of interest rate cuts from the Fed was a turning point for gold. He emphasizes that previously everyone believed that the Fed would be the last to cut rates, but now the situation has changed.

This year, gold has shown impressive growth, setting new records and occupying one of the leading positions among the main commodities.
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Research: 4 risks for the dollar dominance

Researchers from the Brookings Institution have identified several factors that can undermine the dominance of the dollar in global markets. Although the dollar remains the main reserve currency, its share in global reserves has decreased from 71% in 1999 to 59% in 2024.

At the same time, the share of reserves in alternative currencies such as the Australian dollar, Swiss franc and Chinese yuan is growing.

One of the main threats to the dollar is the US sanctions, which have prompted Russia and China to actively seek de-dollarization. Russia is switching to payments in yuan and developing alternative payment systems, while China is promoting its yuan as a substitute for the dollar.

The growing U.S. government debt is also a concern for investors. A rapid increase in government spending and a decrease in the US credit rating may weaken confidence in the dollar and make it less attractive to holders of foreign exchange reserves.

The improvement of payment technologies is another factor threatening the dollar. New systems allow countries such as China and India to exchange their currencies directly, bypassing the dollar. This may reduce the demand for the dollar, which has traditionally been used in international settlements.

In addition, the development of central bank digital currencies (CBDC) increases competition for the dollar. China is actively developing its digital currency and payment systems, while the United States is still lagging behind in this area, which puts the dollar in a less favorable position.

Despite these risks, experts believe that the dollar will remain the dominant currency in the near future, since its competitors cannot yet replace it. However, attempts at de-dollarization can lead to economic problems for those who abandon the American currency.
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The dollar is recovering after the fall

On Thursday, the US dollar recovered from its recent fall, rebounding from a 13-month low. The dollar index, which tracks the USD exchange rate against a basket of six other currencies, rose 0.2% to 101.182.

The recovery of the exchange rate is associated with an increase in demand for the dollar as a "safe currency" amid worsening geopolitical problems in the Middle East, as well as concerns about the resumption of trade disputes between China and the West.

However, the dollar is still under pressure due to the expected reduction in US interest rates next month. In August, the dollar fell by about 2.9%, which was the sharpest drop in the last nine months.

Preliminary GDP data showed the resilience of the American economy, fueling hopes for a soft landing. But the latest data also revealed a weakening of the labor market.

Data on the PCE price index, which is the Fed's preferred measure of inflation, will be released on Friday and is likely to affect interest rate forecasts.
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China is changing the game: new challenges for the global economy

China, long considered the engine of the global economy, is now experiencing a decline in consumer confidence and spending cuts.

The problems of the real estate market, the weakness of the labor market and the fall in stock prices exacerbate the situation, reducing household well-being and leading to a decrease in confidence in the economy. As a result, the trend towards reducing consumer spending is strengthening, which is especially alarming, since China's economic growth is increasingly dependent on domestic consumption.

A weak labor market is a special factor that causes panic and encourages people to stick to conservative measures more. New savings are growing and spending is declining, creating a vicious circle of low confidence and an economically stagnant situation.

It is worth noting that the change in sentiment in China has negative consequences for the global economy. A decrease in import demand leads to a slowdown in global growth. An excess of goods creates deflationary risks, and the retail sales sector is experiencing serious difficulties.

Chinese consumers are becoming cautious, which negatively affects the financial results of the world's leading brands, especially those focused on the Chinese market. Instead of stimulating growth, the Chinese government pays great attention to regulation, preferring the sustainability of expansion.
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Experts: Bitcoin and Ethereum have no future

The period of bitcoin's rapid growth seems to have come to an unexpected end. Many experts and investors are convinced that a further rise in BTC should not be expected. This opinion reflects the current pessimistic sentiment in the cryptocurrency market.

The beginning of the year was marked by general euphoria, when memecoins were considered as a new investment opportunity, and some digital assets predicted an increase of 50 times. However, today, in the face of general skepticism, even moderate forecasts seem too optimistic.

The volatility of the cryptocurrency market has long been known: sharp ups are often replaced by collapses. However, despite the pessimistic forecasts, there is also a positive trend. Thus, Zürcher Cantonalbank, one of the largest banks in Switzerland, has provided its customers with the opportunity to trade and store bitcoin and Ethereum through mobile applications. This happened on September 4 in cooperation with Crypto Finance, regulated by FINMA.

The example of ZKB demonstrates that despite the current difficulties, the process of accepting cryptocurrencies in the financial world continues. In Switzerland, the attitude towards digital assets remains positive, which strengthens their position in the global market.

In general, although the short-term prospects may look disappointing, the long-term adoption of cryptocurrencies and the participation of traditional financial institutions in them indicate their significant potential and sustainability.
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Eurozone GDP grew by 0.2%

The Statistical Office of the European Union (Eurostat) has published final data on eurozone GDP growth in the second quarter. The eurozone economy grew by 0.2% compared to the previous three months and by 0.6% year-on-year, confirming preliminary estimates.

Despite the positive dynamics, consumer spending decreased by 0.1% compared to the previous quarter, and gross capital investment decreased by 2.2%. On the other hand, government spending increased by 0.6% and exports increased by 1.4%, while imports increased by 0.5%.

The dynamics of GDP in individual eurozone countries varies. Germany faced a 0.1% quarter—on-quarter GDP contraction, while France and Italy posted 0.2% growth and Spain 0.8%.

Preliminary data on the dynamics of eurozone GDP in the third quarter will be published on October 30.
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Gold Soars to the Stratosphere

No correction? No problem. Even the slightest dips in gold attract new bulls eager to buy at lower prices. The combination of the Federal Reserve's monetary easing, slowing global economy, uncertainty surrounding the U.S. presidential election, high demand from central banks, and gold's status as a safe-haven asset leaves no doubt about the strength of the upward trend in XAU/USD and the precious metal's ability to set new records.

Rumors of an impending recession are pushing treasury bond yields downward, which in turn is causing global debt yields to fall. The average yield on investment-grade government and corporate debt has dropped to 3.3%, its lowest level since September 2022. The main beneficiary of this process is gold, which pays no interest and easily outperforms bonds when rates fall.

Global Bond Yield Dynamics

The cooling of the U.S. labor market and economy forces the Fed to begin a monetary easing cycle, which has historically benefited precious metals. In theory, the U.S. dollar weakens under such conditions, providing a tailwind for XAU/USD. However, as events in 2023-2024 have shown, gold can rise even amidst a rally in the USD index. It serves as an alternative to fiat currencies, which are suffering from the synchronization of the Fed's monetary easing with other central banks.

Moreover, central banks, especially in developing countries, favor precious metals as assets immune to third-party countries' influence. In particular, the U.S.'s push to impose the dollar as a reserve currency and means of payment is facing resistance and has triggered a process of de-dollarization. As a result, central banks are likely to maintain a high appetite for gold purchases.

Whether Donald Trump or Kamala Harris comes to power in the U.S., the budget deficit will continue to grow. It stands at a record $35.4 trillion, and there are no signs of it decreasing. Both Republicans and Democrats will push for new fiscal stimulus measures, which will increase the imbalance and heighten default risks. This creates an ideal environment for safe-haven assets like gold.

Thus, XAU/USD has plenty of reasons to continue its rally. Will the precious metal wait for the August U.S. inflation data, or will it surge to record highs beforehand? In any case, the deflationary process amid a cooling labor market speaks about the slowdown of the U.S. economy, increases the risks of aggressive monetary easing by the Fed, and lights a green light for the analyzed asset.

Technically, the daily gold chart shows a Spike and Ledge pattern. A breakout of the upper boundary of the consolidation range at $2470–2525 per ounce will increase the chances of a sustained rally toward at least $2575 and serve as a signal for purchases.
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Solar vs. Media Storm: Solar Gains, Trump Media Falls!

US Stocks Gain Thanks to Tech Sector
All three major US stock indexes ended higher on Wednesday. A solid rally in tech stocks offset a morning of disappointment caused by inflation data that dashed hopes that the Federal Reserve would cut interest rates by 50 basis points next week.

The tech sector, represented by the S&P 500 (.SPLRCT), posted an impressive 3.3% gain after starting the day lower. Key to this was Nvidia (NVDA.O), whose shares soared 8%. The reason for the rise was a report from Semafor that the US government is considering allowing Nvidia to export advanced chips to Saudi Arabia.

Political factors fuel investor interest
An additional factor influencing market sentiment was events in the political arena. Democratic candidate Kamala Harris managed to put her opponent, Republican Donald Trump, on the defensive during the presidential debate, which caused some reaction from the market.

Inflation data: expectations were not met
Earlier in the day, the US Department of Labor released data on the consumer price index (CPI), which rose 0.2% in August, which is in line with July. Meanwhile, the core CPI, which excludes volatile food and energy categories, rose 0.3%, beating economists' expectations of a 0.2% gain.

Market Rate Changes: Traders Adjust Forecasts
Following the release of inflation data, traders revised down their expectations for a Fed rate cut. The probability of a 25 basis point rate cut rose to 85% from 66% the day before, while the probability of a 50 basis point cut fell to 15% from 34%, according to CME Group's FedWatch tool.

Investors were hoping for softer inflation data
"The market was probably expecting a more muted inflation reading, which would give the Fed more reason to cut rates by 50 basis points," said Jack Janasiewicz, portfolio manager at Natixis. "However, the report came in slightly above expectations, putting additional pressure on the Fed to limit itself to a 25 basis point cut."

As the trading day wore on, investors gradually adjusted to the new inflation data. Janasewicz also emphasized that it was the technology sector that supported the broader market, standing out from the crowd.

Indices rise amid gains in tech stocks
The Dow Jones Industrial Average (.DJI) rose 124.75 points, or 0.31%, to 40,861.71. The S&P 500 Index (.SPX) rose 58.61 points, or 1.07%, to 5,554.13. The Nasdaq Composite (.IXIC) rose 369.65 points, or 2.17%, to 17,395.53.

Sector Breakdown: Who's Leading and Laggards?
Of the 11 key S&P 500 sectors, six were up, with consumer discretionary stocks (.SPLRCD) leading the way, up 1.3%. Meanwhile, energy (.SPNY) was the laggard, down 0.93%, and consumer staples (.SPLRCS) was down 0.88%.

Financials Hold Their Ground
The S&P 500 Financials (.SPSY) managed to pare its losses by the end of trading, closing down just 0.39% after falling more than 2% at the session low.

Financials Gain
American Express (AXP.N) led the pack, posting the biggest gains after its CFO said on a conference call that lending was holding up and consumer spending was strong.

Big U.S. banks also pared early losses to end the day higher. Goldman Sachs (GS.N) rose 0.9% and JPMorgan (JPM.N) rose 0.8%. The financial sector was under pressure earlier Tuesday on concerns about a drop in trading revenue, a slow recovery in investment banking and a possible decline in interest income in light of upcoming rate changes.

Market Reacts to Political Debate
The political debate also caused notable market moves. Eight weeks before the presidential election and after the debate, contracts on a Kamala Harris victory on the PredictIt platform rose to 57 cents on the dollar of potential payout, up from 53 cents before the debate. Donald Trump contracts fell to 48 cents from 52 cents.

These changes led to a decline in the value of stocks of companies that were expected to benefit from a Trump presidency. In particular, stocks related to cryptocurrency, blockchain, and private prisons showed a decline. Trump Media & Technology Group (DJT.O) shares fell 10.5%.

Solar companies are favorites due to political expectations
Amid the expected benefits for green energy from a Harris administration, shares of solar panel manufacturers have significantly increased. First Solar (FSLR.O) climbed 15.2%, Sunrun (RUN.O) added 11.3% and SolarEdge Technologies (SEDG.O) rose 8.5%.

Markets Remain Unsure After Debate
While the debate did not provide Wall Street with a clear answer to important policy questions, experts believe that Kamala Harris' proposals to raise corporate taxes could weigh on corporate profits. Meanwhile, Donald Trump's tough stance on tariffs could increase inflation risks.

GameStop Slips After News of Share Sale
GameStop (GME.N) shares fell nearly 12% after the company announced plans to issue up to 20 million new shares and reported a decline in second-quarter revenue, raising investor concerns about the company's future growth.

Lithium Stocks Rise After CATL Announcement
Lithium stocks surged after Chinese battery major CATL (300750.SZ) announced plans to adjust lithium carbonate production at its Yichun facility. Shares of Albemarle (ALB.N), one of the world's largest lithium miners, rose 13.6% in response to the news.

Marginal Markets: Stocks Rising and Falling
At the New York Stock Exchange (NYSE), advancers outnumbered decliners 1.4 to 1, with 342 new highs and 130 new lows. On the Nasdaq, 2,337 stocks rose and 1,882 fell, creating a 1.24-to-1 gainer-decliner ratio.

The S&P 500 posted 21 new 52-week highs and 17 new lows, while the Nasdaq Composite posted 48 new highs and 129 lows. Total trading volume on U.S. exchanges reached 12.19 billion shares, above the 20-day moving average of 10.80 billion shares.

Market Rebounds After Morning Selloff
Wall Street recovered from a morning selloff on Wednesday, closing higher. Brent crude prices also rebounded from three-and-a-half-year lows. This came as a key inflation report bolstered expectations that the Federal Reserve will announce a 25 basis point interest rate cut next week.

Debate and the Market: Analyzing the Implications
Investors were closely watching the US presidential debate on Tuesday night to assess possible changes in economic and fiscal policy after the November elections.

By mid-trading, all three major US stock indexes had reversed their downward trend, turning a morning sell-off into a rally. Technology (.SPLRCT), especially chip makers (.SOX), outperformed significantly, helping the Nasdaq to lead the way.

Inflation Data: Mixed Signals for the Market
The annual rate of inflation, as measured by the Consumer Price Index (CPI), fell 0.4 percentage points to 2.5%, below expectations, according to the US Department of Labor. But the benchmark index, which excludes volatile categories such as food and energy, posted a 0.3% monthly gain and a 3.2% annual gain, beating analysts' forecasts.

Inflation expectations remain mixed
"The inflation report was a mixed bag, satisfying both the bears and the bulls," said Chuck Carlson, CEO of Horizon Investment Services in Indiana. "Initially, it looked like a 50 basis point rate cut was unlikely," he continued. "Now investors may be starting to realize that it's not such bad news."

Markets predict Fed rate cut
Markets are pricing in an 85% chance that the Federal Reserve will cut its key interest rate by 25 basis points at its upcoming meeting. The chance of a larger 50 basis point rate cut has fallen to 15%, according to CME's FedWatch tool.

European stocks remain steady ahead of ECB decision
European stock markets ended the trading session little changed as investors turned their attention to the European Central Bank (ECB) and its upcoming interest rate decision expected on Thursday. The pan-European STOXX 600 index (.STOXX) rose a symbolic 0.01%, while the MSCI index of global stocks (.MIWD00000PUS) rose 0.62%.

Asian Markets, Emerging Economies in the Red
Emerging market stocks were down 0.37%. MSCI's broad index of Asia-Pacific shares excluding Japan (.MIAPJ0000PUS) fell 0.24%, while Japan's Nikkei (.N225) lost 1.49%.

Bonds: Yields stabilise after recent swings
U.S. 10-year Treasury yields steadied after an early decline, with rates hitting their lowest since June 2, 2023. The 10-year yield was last at 3.6609%, down from 3.644% at Tuesday's close, with the price down 5/32. The 30-year note also fell 12/32, pushing its yield up to 3.9743% from 3.954% the previous day.

Dollar Strengthens on Inflation Data
The U.S. currency showed modest gains against a basket of global currencies after inflation data confirmed expectations for a smaller 25 basis point rate cut.

The dollar index (.DXY) rose 0.08%, while the euro slipped 0.04% to $1.1015.

Yen Strengthens, Pound Loses
The Japanese yen strengthened 0.04% against the U.S. dollar to trade at 142.40 per dollar. The British pound was last seen at $1.3042, down 0.28% on the day.

Oil Recovers After Selloff
Oil prices steadied after Tuesday's big losses as U.S. crude inventories fell and supply disruptions from Hurricane Francine offset concerns about weaker global demand.

U.S. WTI crude rose 2.37% to $67.31 a barrel, while Brent crude rose 2.05% to $70.61 a barrel.

Gold Loses as Rate Cut Hopes Dim
Gold prices slipped as expectations for a bigger Fed rate cut at its upcoming monetary policy meeting faded.
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Moderna's bleak outlook drags stocks lower, Warner Brothers inspires investors with 10% gain

Wall Street is on the rise again: gold hits records
US stock markets showed solid gains on Thursday, with gold prices reaching a new all-time high. Investors are optimistic about the upcoming Federal Reserve meeting, expecting an interest rate cut as early as next week.

Stock indices end the day higher
The key US indices fluctuated in mixed territory for most of the trading day, but showed solid gains by the close. The European Central Bank's recent decision to cut interest rates and slightly better-than-expected U.S. producer price data helped fuel the rally. Despite this, investors remain confident that the Fed will cut rates slightly at its next meeting.

The Dow Jones Industrial Average added 0.58%, the S&P 500 rose 0.75%, and the tech-heavy Nasdaq Composite rose 1%. Strong results from tech companies helped the Nasdaq take the lead in growth.

World markets trending
The MSCI World Equity Index, which measures markets around the world, rose 1.08%, confirming positive investor sentiment in global markets.

ECB Cuts Rates Again
Earlier on Thursday, the European Central Bank announced its second interest rate cut in three months, which was driven by slowing inflation and weakening economic growth in the eurozone. The cut was predictable, but the ECB has yet to give clear signals about its future plans.

While the 0.25% rate cut did not come as a surprise to the market, the question remains as to how decisively and quickly the central bank will act in the remaining months of the year.

Focus on the Federal Reserve
Market participants are now focused on the upcoming Federal Reserve meeting, which will decide on the key interest rate on Wednesday. Investors are expecting the Fed to make the first rate cut since 2020. However, fresh economic data released on Thursday suggest that the Fed will likely limit the rate cut to 25 basis points, rather than the larger 50 basis point cut that some analysts had previously expected.

Inflation data softened expectations
An important factor for the upcoming Fed decision was the inflation data released on Wednesday and Thursday. The indicators point to a slight increase in prices, but the rate of inflation remains relatively low. Thus, the core consumer price index increased by 0.28% in August, which is higher than the expected growth of 0.2%. In addition, the data on producer prices also exceeded expectations: in August, they grew by 0.2% instead of the expected 0.1%. Despite this, the general trend remains in favor of slowing inflation, which increases the likelihood of a moderate rate cut.

The dollar weakens, the euro grows
Amid expectations of a rate cut, the US dollar showed weakness against major world currencies. The dollar index, which tracks its dynamics against a basket of leading currencies, fell by 0.52%, reaching 101.25. At the same time, the euro strengthened by 0.54%, reaching $1.1071. This trend reflects global changes in investor sentiment, who expect further easing of monetary policy in the United States.

Oil prices rise: Hurricane impact, production recovery
Oil prices continued their upward movement, adding almost 3%, amid investor concerns about how severely U.S. crude output will be affected by Hurricane Francine in the Gulf of Mexico. On Thursday, producers announced forced production cuts, but there were signs that some export ports were partially reopening.

WTI crude rose 2.72% to $69.14 per barrel, while benchmark Brent crude rose 2.21% to $72.17 per barrel.

Gold at new heights: a safe haven for investors
Gold prices soared to all-time highs as expectations of an imminent Fed rate cut made the precious metal even more attractive for investment. Amid market instability, gold has once again confirmed its status as a "safe haven" for capital.

Spot gold rose 1.85% to a record $2,558 an ounce, while U.S. gold futures rose 1.79% to settle at $2,557 an ounce.

Bond Market: Yields Rise on Inflation Data
U.S. Treasury yields also showed modest gains. The two-year yield rose 1.2 basis points to 3.6579%. The 10-year yield rose 3 basis points to 3.683%.

Inflation Beats Expectations
The Producer Price Index (PPI), which tracks changes in the cost of goods and services at the producer level, rose 0.2% in August, beating expectations for a 0.1% gain. The core measure, which excludes volatile items such as food and energy, rose 0.3%, also beating expectations for a 0.2% gain.

Labor Market Remains Stable
The number of initial jobless claims in the United States for the week ending September 7 was 230,000, which was in line with analysts' expectations. This data confirms the stable state of the American labor market, despite some macroeconomic fluctuations.

Employment and Economic Growth: Market Awaits Fed Decision
The latest economic reports show weakening employment and slowing economic growth, which has raised expectations for a deeper 50 basis point rate cut by the Federal Reserve. However, the release of inflation data on Wednesday changed the market sentiment, with traders now assessing the likelihood of a more modest cut.

Fed: Rate Cut Likely
Despite Thursday's fluctuations, CME's FedWatch tool showed that traders still have a 69% chance of expecting the Fed to cut interest rates by 25 basis points at the September 17-18 meeting. If that happens, it would be the first rate cut since March 2020, marking an important step in monetary policy.

Russell 2000 Leads Gain
Against these expectations, the Russell 2000 index of small-cap companies was the best performer among the indices, gaining 1.2%. That underscores confidence that small businesses can benefit from the upcoming easing of credit conditions.

S&P 500: All Sectors in the Green
All 11 industry sectors in the S&P 500 ended the day in positive territory. Communications services led the way, rising 2%. Warner Bros Discovery was particularly strong, jumping 10.4% after the company announced an agreement with Charter Communications to give customers access to ad-supported versions of its Warner Max and Discovery+ streaming services. Charter also posted a strong gain, gaining 3.6%.

Moderna Under Pressure
Not all stocks ended the day in positive territory. Shares of vaccine maker Moderna fell 12.4%, hitting their lowest since November last year. The company announced revenue guidance for next year in the range of $2.5 billion to $3.5 billion, which was lower than analysts expected, which caused the stock to fall.

Kroger pleases investors: shares soar
One of the brightest news of the day was the rapid growth of shares of the supermarket chain Kroger, which rose by 7.2%. This happened because the company exceeded expectations for the second quarter results and raised the lower limit of its annual sales forecast. The optimistic report became a signal to investors that the chain is confidently coping with market challenges.

Gold miners on a wave of success
Shares of companies involved in gold mining sharply went up, following the rise in prices of the precious metal. The spot price of gold reached an all-time high, which led to a 5.8% increase in the Arca Gold BUGS index. Investors continue to view gold as a safe haven against market risk and inflation, fueling interest in the gold mining sector.

Bulls outnumber losers on the NYSE and Nasdaq
On the New York Stock Exchange (NYSE), advancers outnumbered losers by a wide margin, 3.45 to 1. There were 405 new highs and just 46 new lows, a strong showing for bulls.

On the Nasdaq, advancers also outnumbered losers by a wide margin, 1.73 to 1. The S&P 500 posted 37 new yearly highs and no new lows, signaling positive sentiment in the market, while the Nasdaq Composite posted 73 new highs and 76 new lows, showing more diversity in stock performance.

Volumes Remain Steady
The total volume of shares traded on U.S. exchanges was 10.58 billion, just slightly below the 10.82 billion average over the past 20 trading sessions. This figure shows that activity in the markets remains strong despite some swings in individual sectors.
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India: economic growth is possible up to 8%

The head of the Reserve Bank of India, Shaktikanta Das, expressed confidence in the country's ability to achieve sustainable economic growth in the region of 7.5-8% in the medium term.

This statement was made against the background of published data on the slowdown in India's GDP growth to 6.7% in the second quarter of this year, compared with 8.2% in the same period last year. This dynamic has increased the pressure on the RBI to lower interest rates.

Das stressed that steady growth of 7.5-8% is realistic for the largest country in the world. Although the International Monetary Fund previously called India the «fastest growing major economy in the world,» growth has slowed in recent quarters and the IMF forecasts a decline to 6.5% in 2025.

The head of the RBI also noted that the influence of external factors, such as the actions of the Fed, is taken into account, but internal factors remain decisive. The question of a possible reduction in the RBI rate in October remained open. Das stated that the decision will depend on the monthly dynamics of inflation and growth.
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Oil growth is held back by concerns about weakening demand

Yesterday, Brent oil prices rose to $73.30 per barrel, supported by expectations of lower interest rates and supply disruptions caused by Hurricane Francine.

However, this growth was held back today by concerns about declining demand, especially in China, amid weak economic data released over the weekend. The current Brent quote is $72.50 per barrel. North American WTI crude is trading near $68.96.

Supply disruptions due to Hurricane Francine

After Hurricane Francine, oil production in the Gulf of Mexico decreased by 12%, and natural gas production by 16%. These disruptions may contribute to further price increases, although oil companies have been actively restoring production in recent days as the hurricane weakens.

Awaiting the Fed's decision

Investors are waiting for the meeting of the US Federal Reserve System, which will be held on Wednesday. The central bank may lower rates, which will support oil prices. Expectations of a more significant rate cut of 50 basis points put pressure on the dollar and stimulate the growth of oil prices.

Concerns about demand

However, the increase in oil prices is limited by concerns about slowing economic growth in China. The recent weak economic performance of China, the world's largest oil importer, has increased concerns about demand for black gold. An additional negative was brought by the forecasts of OPEC and the IEA, which lowered expectations of oil demand for the coming years.
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Inflation in the eurozone has slowed to 2.2%

Inflation in the eurozone slowed to 2.2% in annual terms in August, according to the final report of Eurostat. This decrease compared to July's 2.6% inflation coincided with the preliminary estimate and forecasts of analysts. On a monthly basis, prices in the region increased by 0.1%.

The CPI Core index (core inflation), which does not take into account volatile prices for energy, food and alcohol, showed an increase of 2.8% year-on-year.

Prices for food, alcohol and tobacco products increased by 2.3%, similar to the July figure. Energy prices, on the contrary, decreased by 3% after rising by 1.2% in July. Services have risen in price by 4.1%. In the 27 EU countries, the annual price increase was 2.4% after 2.8% in July.

The lowest inflation was recorded in Lithuania (0.8%), Latvia (0.9%), Ireland, Slovenia and Finland (1.1%). The highest growth in consumer prices was recorded in Romania (5.3%), Belgium (4.3%) and Poland (4.0%).
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In Germany, annual inflation fell to 2.0% from 2.6% in July, in France — to 2.2% from 2.7% a month earlier, in Italy — to 1.2% from 1.6% in July, in Spain — to 2.4% after 2.9% a month earlier.

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Kiyosaki: Bitcoin, gold and silver will soar in price

Robert Kiyosaki, author of the book «Rich Dad, Poor Dad», predicts significant growth of bitcoin against the background of easing monetary policy of the US Federal Reserve System.

In his opinion, lower interest rates will force investors to move away from "fake assets" such as bonds and invest in real assets such as bitcoin, gold and silver.

In his post on the social network «X», Kiyosaki stressed that those who argue about the advantages of gold or bitcoin will lose when the Fed continues to cut rates and prices for real assets begin to rise. The author criticized the debate about which is better, gold or bitcoin, comparing them to people «arguing about a Ferrari or Lamborghini while on the bus.»

After the Fed's rate cut on Wednesday evening, bitcoin continued its recent rise. On Thursday morning, the main digital coin rose to 3-week highs at $62,645. Subsequently, the quotes partially rolled back – the current BTC/USD quote is $62,093.
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The consumer confidence index in the UK in September fell to the lowest in 6 months

The UK consumer confidence index in September 2024 fell to the lowest value in the last six months, amounting to -20 points, which is significantly lower than in July and June, when it was at the level of -13 points.

For comparison, in September 2023, the index was at -27 points (previously reported at -21 points). All five components of the indicator showed a decrease compared to July.

The subindex, reflecting consumers' assessment of their financial situation over the past year, fell to -9 points (in August it was -7), which is better than a year earlier, when it was -18 points. Personal finance expectations for the next 12 months also worsened, falling to -3 points from +6 in the previous month. A year earlier, this indicator was at the level of -6 points.

Consumers' assessment of the overall economic situation over the past year has dropped to -37 points compared to -35 a month earlier. The forecast for the next 12 months deteriorated even more: to -27 points from -15 in August.

The willingness of the British to spend money on large purchases also decreased, the subindex fell to -23 points from -13 points in August. In September last year, this indicator was at the level of -28 points.

The average index of consumer confidence for the period from 1981 to 2024 is -10.9 points. The record value of 10 points was recorded in June 1987, while at least (-49 points) was recorded in September 2022.
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Gold updated the record in anticipation of fresh signals from the Fed

Gold prices have reached a new historical high in Asian markets due to the optimistic sentiment caused by lower interest rates in the United States. Additional support for the market was provided by the expectations of speeches by representatives of the Federal Reserve System, which may shed light on the further steps of the regulator.

After the Fed lowered the rate by 50 basis points, gold has updated its records and continues to hold its positions confidently. The spot price of gold rose 0.3% to reach $2,631.19 per ounce, while futures rose 0.4% to $2,655.80 per ounce. The weakening of the dollar and the decline in Treasury bond yields also contributed to the strengthening of the metals market.

Experts expect further easing of the Fed's monetary policy, which may lead to a reduction in rates by an additional 125 basis points during the year. A number of key Fed officials, including Chairman Jerome Powell, are scheduled to speak in the coming days, which may provide additional signals for the markets.

Another important event will be the publication on Friday of a report on the PCE index, the main indicator of inflation for the Fed, which may affect further decisions by the regulator on rates. In addition, investors' attention is focused on the meetings of the central banks of Switzerland and Sweden, where interest rates are also expected to decrease.

Other precious metals, however, are showing a decline. Platinum futures fell 0.6% to $974.10 per ounce, while silver contracts fell 0.2% to $31.43 per ounce.
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The Central Bank of China reduces a number of rates as part of a large-scale economic stimulus program

The People's Bank of China has announced a package of measures to stimulate the economy. The head of the regulator, Pan Gongsheng, announced a reduction in the reserve requirement ratio (RRR) for large banks by 0.5 percentage points to 9.5%, which will release about 1 trillion yuan ($142 billion) of liquidity. There will be no changes for small and rural banks. It is expected that during the year the RRR may be reduced by another 0.25-0.5 percentage points.

The NBK also lowered the rate on seven-day reverse repo transactions from 1.7% to 1.5%, which will reduce the cost of borrowing under the medium-term lending program (MLF). For the first time in 10 years, the bank simultaneously lowered the RRR and the interest rate.

In addition, it is planned to reduce the base interest rate (LPR) by 0.2-0.25 percentage points, which will affect the cost of corporate, consumer and mortgage loans. Interest rates on mortgages already issued will be reduced by 50 bps, affecting borrowings worth about $5.3 trillion. The initial payment for the purchase of a second home has been reduced to a record low of 15%.

The NBK also plans to refinance mortgage loans and has increased guarantees on bank loans for unsold housing to 100%. Beijing is considering the creation of a stabilization fund for the stock market with support in the amount of at least 800 billion yuan. As part of the program, it is planned to exchange illiquid assets for government bonds and provide a 300 billion yuan re-loan for share repurchase.
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Oil may rise in price due to a drop in production in the United States

Analysts believe that after the recent decline in crude oil prices, the situation may soon change due to the expected slowdown in oil production in the United States.

For most of 2024, oil showed positive dynamics, but in recent months the yield has turned negative: the cost of Brent decreased by 3.5%, and WTI – by 0.4% year-on-year.

According to experts, fluctuations in oil prices are caused by both demand and supply factors. The global economy is slowing down, which is holding back demand, and market participants are concerned about a possible increase in oil production by the largest producers — OPEC+ and the United States. However, a number of experts believe that these expectations have already been taken into account in current prices, and in fact the situation may turn out to be different.

«Although oil demand was low in 2024, its decline is not accelerating, which is important against the background of rising global liquidity and lower interest rates,» Wells Fargo Bank said.

In addition, the bank assumes that with prices in the range of $60-70 per barrel, OPEC+ and the United States will reduce rather than increase production, which will help strengthen the market.

Special attention is paid to the statements of OPEC+ on the postponement of the increase in production scheduled for October 2024, as well as the fact that production growth in the United States may also slow down, as the cost of opening new wells reaches $ 64 per barrel. As a result, oil prices are projected to start rising again in the coming months.
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The market is waiting for the ECB to cut rates after inflation in France and Spain fell below 2%

The probability of a reduction in key interest rates by the European Central Bank in October increased significantly after the publication of data on slowing inflation in France and Spain.

According to traders, the chances of a 25 basis point rate cut at the ECB meeting on October 17 have increased to 80%. Analysts at major banks such as BNP Paribas and HSBC share similar expectations.

Consumer prices in France, harmonized according to EU standards, increased by 1.5% y/y in September, which is significantly lower than the August figure of 2.2%. A similar trend is observed in Spain, where inflation slowed to 1.7% – this is the lowest growth rate since June 2023, while in August the price increase was 2.4%.

Both of these indicators have reinforced expectations that inflationary pressures are easing, which may lead to a change in the ECB's monetary policy. Currently, the ECB deposit rate is 3.5%, the rate of basic refinancing operations is 3.65%, and the rate on margin loans is 3.9%.
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The Fed will cut the rate by another 50 bps in 2024 while maintaining the stability of the economy

The US economy remains strong, and the Federal Reserve System (Fed) intends to maintain it in this state, Federal Reserve Chairman Jerome Powell said at the annual meeting of the National Association for Business Economics (NABE).

Powell also noted that the Fed is trying to reduce inflation, while preventing a significant increase in unemployment.

The Fed's recent decision to lower the interest rate by 50 basis points (bp) reflects confidence that the adjustment of monetary policy will maintain the stability of the labor market with moderate economic growth and a reduction in inflation to the target 2%. This is what is called a «soft landing» of the economy.

According to the median forecasts of the Fed's management, the base rate will be reduced by another 50 bps by the end of 2024, from the current level of 4.75-5% per annum.

«If the economic situation develops according to our forecasts, we will cut the rate twice by 50 bps,» Powell said, stressing that further decisions will depend on incoming economic data. The main goal is to bring the rate to a neutral level, which, according to the Fed's estimates, is about 3%.
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The dollar is strengthening, the euro is falling: all attention is on the US labor market

The DXY dollar index soared to a 3-week high of 102.05, bringing the EUR/USD pair to strong support at 1.10. The dollar's recovery is driven by strong data on the US economy and labor market, as well as expectations of a slowdown in the Fed's rate cuts.

On Thursday, the dollar index reached a six-week high, supported by indicators of the service sector and a positive picture on the labor market. The probability of a Fed rate cut by 50 bps in November fell to 32%, which led to a 1.5% strengthening of the dollar over the week.

At the same time, the euro is losing 1.2% amid the likelihood of an ECB rate cut this month to 90%. The slowdown in inflation and the deterioration of the economic situation in the eurozone may force the regulator to soften the PREP.

On Friday, all attention will be focused on the Non-farm payrolls report on the US labor market. The number of employees is expected to increase by 150 thousand. High indicators can strengthen the growth of the dollar.

Against the background of geopolitical tensions in the Middle East, the USD/JPY pair is also strengthening, reaching 147.0. The Japanese authorities are not planning new currency interventions yet.

In the UK, the index of business activity in the service sector slowed down, but remained steady. The GBP/USD pair is trading around 1.315.
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Investor concerns are slowing down the growth of the Brazilian economy

The easing of the monetary policy of the US Federal Reserve and China's intention to stimulate its economy create favorable conditions for Brazil.

Despite this, Moody's, which upgraded Brazil's rating to the highest junk level, could not convince investors. The Brazilian real and the country's stock market are showing weak results.

Experts note that rating agencies are focused on past events, and markets are looking to the future. Since the beginning of 2024, the Brazilian real has lost about 11% of its value, and the benchmark Bovespa Brazilian stock index has declined by 1.9%.

Despite the positive external factors, the Brazilian real continues to fall. Investors fear that the Brazilian economy is overheated, which could lead to a tightening of monetary policy. Last month, the Brazilian Central Bank raised the rate by 0.25% to 10.75% per annum, which also does not inspire optimism.
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Oil returned to below $80 after a sharp rise

On Tuesday, oil declined from the area of local highs, as investors began to take profits after a significant increase the day before.

Yesterday, Brent reached new highs since the end of August, breaking the $81 per barrel mark. The current quote of the asset is $79.20 per barrel. North American WTI crude is trading near $75.40 after yesterday's rise to $77.70 per barrel.

Last week, oil strengthened amid geopolitical tensions in the Middle East, where traders fear possible Israeli attacks on Iran's oil facilities. An additional risk arose in the Gulf of Mexico, where Chevron temporarily stopped work on its Blind Faith oil and gas platform due to the hurricane.

The API report on oil and petroleum products reserves in the United States is expected to be released today, preceding the official data of the Ministry of Energy. However, traders are now primarily focused on geopolitics, which has a greater impact on market sentiment.
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Bank of America: inflation will remain moderate in September

Bank of America forecasts moderate growth in both the core and core consumer price index in September, indicating stable core inflation without alarming signals.

The bank expects a monthly increase of 0.1% for the main index and 0.3% for the base index. Lower energy prices will soften the growth of the main indicator, while higher rents and used car prices will support the growth of the base indicator.

On an annual basis, Bank of America forecasts a decrease in core inflation to 2.3%, while the core CPI will remain at 3.2%. BofA analysts, based on data on inflation forecasts by component, expect core inflation at 0.18% on a monthly basis.

Despite the fact that inflation continues to move in the right direction, the upcoming report is likely to have no significant impact on the central bank's rate. The findings confirm the possibility of further rate cuts, but do not give grounds for concern about the current inflation rate.

If the report shows an acceleration in the pace of price growth in September, this could be a positive for the dollar, which has been strengthening for eight consecutive sessions at Wednesday's auction.
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British economy: growth after two months of stagnation

According to operational data from the Office for National Statistics, published on Friday, the British economy grew by 0.2% in August compared with the previous month.

After stagnating in June and July, following modest but steady growth at the beginning of the year, the UK emerged from a mild recession earlier this year.

The release of economic growth data coincided with the upcoming autumn budget, which Treasury Secretary Rachel Reeves will present at the end of the month. The budget, expected by many, will include tax increases and spending cuts aimed at eliminating the estimated deficit in public finances, estimated at 22 billion pounds ($29 billion). However, the Conservative Party, which ruled the country before the snap elections, denies there is a deficit.

Reeves also did not rule out the possibility of revising the rules on the country's debt obligations in order to attract more investment.

The government claims that these measures are part of its «national renewal» program aimed at restoring optimism in society after warnings about the state of the economy.
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Copper rises in price on positive signals from China

Copper futures are rising for the third day in a row on the back of positive economic news from China and expectations of new support measures from Beijing.

Activity in the service sector in China increased last month at the fastest pace since July, and recent data also showed an increase in business activity in the industry. These indicators suggest that China's efforts to stimulate the economy are beginning to have an effect.

According to forecasts, at a meeting of the Standing Committee of the National People's Congress, the Chinese government may announce additional support measures.

Metals, including copper, had previously declined in price as initial optimism about China's stimulus measures gave way to doubts. However, this week the markets will also be watching the results of the US elections, which may add volatility. According to Citigroup, copper on election day has typically grown in nine of the last ten election cycles and may temporarily rise in price to $10,000 per ton amid monetary easing in China and the United States, as well as possible changes in tariffs depending on the outcome of the election.

Copper rose 0.43% on the London Metal Exchange and is trading at $9,724.50 per tonne. Aluminum also rose 0.78% to $2,641 per tonne after reports of a decline in inventories in China to the lowest level since February, according to Shanghai Metals Market.

Iron ore futures rose 1.39% to $103.91 per tonne on the Singapore Stock Exchange, continuing a similar rise since Monday.
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Bitcoin has updated the historical record amid Trump's victory

On the night of November 6, the bitcoin exchange rate reached a new historical high, exceeding the $75,000 mark.

According to Coinmarketcap, the cost of one bitcoin was $74,909, after which the exchange rate decreased slightly and began to grow again, stopping at $74,500.

On the Binance exchange bitcoin was briefly trading at exactly $75,011.

The growth of bitcoin occurred against the background of the US presidential election held yesterday, as a result of which Donald Trump, known for his support of cryptocurrencies, won. This has caused optimism among investors who expect positive changes for the digital asset market.

Bitcoin set the previous record in March 2024, when its exchange rate reached $73,777.
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The price of oil is falling amid the rising dollar

On Thursday, the price of oil continued to fall after the US presidential election, succumbing to the pressure of the rising dollar.

The price of Brent decreased by 0.6% to $74.15, and WTI — by 0.88% to $70.97. Experts note that the strengthening of the dollar and weak demand are putting pressure on the price of oil. At the same time, potential price growth factors are associated with the possibility of tougher sanctions against Iran and Venezuela, as well as the risks of geopolitical aggravation in the Middle East.

Analysts believe that in the short term, oil prices may continue to decline unless serious geopolitical events occur. Other experts believe that Trump's policy aimed at supporting business can contribute to the growth of the economy and fuel demand. However, intervention in the Fed's easing policy may have a negative impact on the oil market.

Additional pressure on prices is exerted by a decrease in oil imports to China and an increase in oil reserves in the United States. It is expected that Trump will resume the policy of sanctions against Iranian oil, which may lead to a reduction in supplies. This, in turn, may have an impact on prices in the future.
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Bitcoin has broken the historical maximum of $81000

The bitcoin exchange rate exceeded $81,000 for the first time after Donald Trump's victory in the US presidential election. Traders expect a relaxation of cryptocurrency regulation by Trump, who has previously expressed his support for them.

On Monday, bitcoin rose 2.8% to $81,241. Over the past week, the growth was 14%, over 25% in a month, and over 100% in a year.

Republicans, in addition to Trump's victory, are approaching full control of Congress. This will allow the new administration to implement policies that will support cryptocurrencies.

Experts suggest that the new administration will bring positive changes, in particular, in the work of the Securities and Exchange Commission. These changes will lead to a softer regulatory stance on digital assets.

They also note that the increased demand for bitcoin is due to a combination of favorable factors: reduced regulatory risks, improved financial conditions and optimistic macroeconomic prospects for the United States.
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Oil continues to fall: weak demand and strengthening of the US dollar

Oil continues its rapid decline, experiencing the most serious drop in two weeks. Weak demand in China, a strong US dollar and fears of oversupply are putting negative pressure on prices.

Brent futures fell almost 3% on Monday and are trading below $72 per barrel. WTI prices also fell to $67.78, losing about 0.37%.

China's recent efforts to stimulate the economy have not met investors' expectations, and inflation in the country remains low. At the same time, the US dollar index has reached new multi-month highs, which makes oil more expensive for most buyers.

The oil market has been in a relatively narrow range since the middle of last month, but now the outlook remains weak. Oil supply is expected to exceed demand next year. OPEC's monthly market report, expected later on Tuesday, may shed light on the prospects for market balance.

Experts note that significant factors are needed to change the negative trend in the oil market, such as the postponement of the return of OPEC+ oil production or the imposition of US sanctions against Iran.
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Economic expectations in Germany are falling amid the US elections

November brought negative news for investor and analyst sentiment in both Germany and the eurozone. The data from the economic expectations index clearly show a decline in optimism.

The German index fell to a modest 7.4 points from 13.1 points in October. This sharp decline, significantly exceeding the projected 13 points, is primarily due to unstable political events both inside and outside Germany.

Donald Trump's victory in the US presidential election has caused a noticeable negative impact on economic expectations. While the economic recovery is growing in the United States, the situation in the eurozone and China, on the contrary, is deteriorating.

In parallel with the drop in the expectations index, the assessment of the current economic situation also decreased to -91.4 points, reaching the lowest level since May 2020.

The situation in the eurozone is not much better: the index of economic expectations fell to 12.5 points from 20.1 points, not meeting forecasts for growth to 20.5 points. The assessment of the current economic situation in the eurozone also decreased by 3 points, reaching -43.8.
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China has prepared countermeasures in case of increased trade competition with the United States

China has prepared effective countermeasures in case the trade standoff with the United States intensifies under the leadership of new President Donald Trump.

During Trump's first term, Beijing was not prepared for Washington's tough moves, including the imposition of increased tariffs and tighter controls on Chinese investments. However, over the past eight years, China has significantly strengthened its position by passing laws that allow foreign companies to be blacklisted and restrict U.S. access to critical supply chains.

Today, Beijing has legislative tools to counter sanctions imposed by other countries, and has compiled a «list of unreliable organizations» that undermine China's national interests. In addition, the expanded law on the control of exports of dual-use goods allows China to use its dominant position in global markets for the supply of key resources as an instrument of pressure.

A number of analysts believe that many underestimate the possible damage that China can cause to the US economy. An example is the recent ban on the supply of components for the largest American drone manufacturer Skydio, which supplies equipment for Ukraine as well. These sanctions make it difficult to access critical components needed for production.

After winning the election, Donald Trump should succeed Joe Biden in January 2025. In his election campaign, he promised to abolish the most-favored-nation status in trade with China, which will allow any tariffs to be imposed, and also announced his intention to "divide" Russia and China in order to weaken their strategic alliance.
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Why the US Dollar Will Continue to Strengthen

Yesterday, the euro and pound quickly lost ground against the US dollar after Federal Reserve Chair Jerome Powell confirmed traders' concerns by stating that recent data provides the central bank with room to lower interest rates cautiously.

"The economy is not signaling any need for us to rush into rate cuts," Powell said on Thursday in Dallas. "The current state of the economy allows us to approach our decisions cautiously."

The Fed began lowering borrowing costs in September with an aggressive half-point cut, followed by a quarter-point reduction last week. The Fed indicated readiness to continue lowering rates if inflation remains subdued. However, Powell's remarks align with several colleagues who advocate for a more gradual approach to future rate cuts.

Powell's comments have tempered market expectations for a December rate cut. Policy-sensitive two-year Treasury yields rose by eight basis points to 4.36%, while swap traders reduced the odds of a December rate cut to less than 55%, down from about 88% the day before.

Powell also addressed recent data, noting that inflation remains on a bumpy path: "The economy shows no urgency for rate cuts, as inflation demonstrates some signs of picking up," Powell stated on Thursday. He added that uncertainty about the neutral rate—where policy neither stimulates nor restrains growth—warrants caution. This week, several Fed officials highlighted the importance of defining the new neutral rate as a key factor in shaping future policy.

"We should be cautious in this environment," Powell said. "As the central bank approaches the plausible range of neutral levels, it may be the case that we slow the pace of what we're doing."

As I noted above, recent data showed that headline inflation in October remained unchanged, while the core Consumer Price Index (CPI), excluding food and energy costs, rose 0.3% for the third consecutive month. "Inflation is approaching our long-term 2% target, but it hasn't reached it yet," Powell said. "We are committed to finishing the job. With labor-market conditions in rough balance and inflation expectations well anchored. I expect inflation to continue its descent toward 2%, albeit on a bumpy trajectory."

Powell refrained from commenting on the likelihood of a December cut.

Monetary policy could face new headwinds following President-elect Donald Trump's potential tax cuts, immigration restrictions, and tariffs. Political uncertainty may further reinforce the Fed's cautious stance on rate cuts.

The US dollar has gained significant strength over the past two weeks and now dominates the forex market.

As for the current technical picture of EUR/USD, buyers need to reclaim the 1.0580 level to target a test of 1.0615. A move beyond this level could lead to 1.0655, although such progress will require support from major market players. The most distant target is 1.0690. If the trading instrument declines in 1.0540, I expect major buyers to take action; failing that, it would be good to wait for the 1.0495 low to be updated or to open long positions from 1.0460.

As for the current technical picture of GBP/USD, pound buyers need to break through the nearest resistance at 1.2680 to aim for 1.2725, above which breaking through will be quite problematic. The furthest target will be 1.2760, followed by a potential sharp rally to 1.2796. Bears will aim to regain control of the 1.2630 area if the pair declines. A breakdown here would deal a significant blow to bullish positions, pushing GBP/USD toward 1.2585, with a further target at 1.2550.
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Electricity prices in Germany have soared to record levels

In Germany, electricity prices have peaked in the last 12 months. The driver of growth was the upcoming cold snap and a decrease in the production of renewable energy sources.

Futures for next month in Europe's largest economy rose 4.4%, reaching their highest value since October last year.

Despite a relatively mild autumn, a colder winter is expected in most of the continent, which will lead to increased demand for electricity and natural gas. Weather forecasts point to lower temperatures in the coming days, especially in Berlin, where temperatures are expected to drop to 1°C.

A decrease in the projected wind energy production in Germany for most of this week also has a negative impact on the market.

The cold weather also encourages utilities to consume more natural gas from storage facilities, which contributes to higher fuel prices. Uncertainty about supplies from Russia adds even more risks to the market.

As a result, the price of electricity in Germany for the next month increased to €108 per MWh, and in France – to €101.5.
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ECB: AI bubble threatens financial stability

The European Central Bank (ECB) has expressed alarm about a possible bubble in the stock market related to artificial intelligence (AI).

In its semi-annual financial stability review, the ECB noted that the stock market, especially in the United States, is increasingly dependent on several companies considered leaders in the field of AI. This concentration raises concerns about the possibility of an AI asset bubble. Investors demand a low premium for owning stocks and bonds, and funds have reduced their cash reserves, which can cause a shortage of cash and forced asset sales.

The central bank warned that if investors' expectations for the revenues of these companies are not met, then a sudden drop in asset prices may occur, which threatens adverse global consequences.

The ECB expressed concern about the low liquidity of assets and the reduction of funds' cash reserves, which could lead to forced asset sales and a decrease in their value. Among other risks, the ECB noted the vulnerability of the eurozone to trade fragmentation and possible negative consequences from the introduction of tariffs, as well as an increase in borrowing by eurozone countries at higher interest rates.
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