Global markets show varied results driven by escalating Middle East tensions
Date
10/9/2024 5:13:12 AM
(MENAFN) Global markets exhibited a mixed performance recently, largely influenced by the anticipation that the Federal Reserve may prolong its rate-cutting cycle. Simultaneously, escalating tensions in the Middle East have dampened investors' risk appetite, leading to varied responses across different markets. In the money markets, there remains an 87 percent likelihood of a 25-basis-point rate cut by the Fed in November, while the prospect of a more significant 50-basis-point reduction has been entirely ruled out, signaling a cautious approach from market participants.
In terms of fixed income, the US 10-Year Futures bond yield surged above 4 percent for the first time since August, reflecting shifting investor sentiment. The US Dollar Index was seen hovering around 102.4 on Tuesday. Meanwhile, commodities displayed mixed results; the price of gold saw a 0.4 percent decline, settling at USD2,643 per ounce, while Brent crude oil increased by 3.8 percent, closing at USD80.8 per barrel before trading slightly lower at USD79.5. On the New York Stock Exchange, major indices faced losses on Monday, with the Dow Jones falling 0.95 percent, the S&P 500 down by 0.96 percent, and the Nasdaq slipping 1.17 percent. American index futures began Tuesday on a somewhat mixed note, reflecting the overall uncertainty in the market.
In Europe, the outlook appeared generally positive, with the exception of Germany, where economic concerns persist. Recent data revealed that Germany's automobile sales fell by 4.7 percent year-on-year in the first half of the year, while factory orders plummeted by 5.8 percent in August. The European Central Bank (ECB) is expected to lower its interest rates by an additional 25 basis points in October, driven by faster-than-expected cooling of inflationary pressures. On Monday, European indices saw varied performances; the FTSE MIB rose by 0.66 percent, the CAC 40 increased by 0.46 percent, and the FTSE 100 gained 0.28 percent, whereas the DAX 40 experienced a slight decline of 0.09 percent. European futures opened Tuesday with mixed signals, reflecting ongoing economic uncertainties.
In Asia, market sentiment leaned towards a sales-heavy trend, with a disappointing economic briefing from Chinese officials leaving investors dissatisfied despite previously announced incentives. Chinese officials indicated plans to continue issuing ultra-long-term bonds next year to finance major projects and invest approximately 100 billion Chinese yuan (USD14 billion) in strategic sectors. In reaction to this news, the Shanghai Composite Index retraced some of its earlier gains after surging by 11 percent. Furthermore, Japan reported a year-on-year decline of 1.9 percent in household spending for August, highlighting ongoing economic challenges in the region.
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