Brent Falls 3.2 Percent to USD109 as Midterms
(MENAFN) Global markets opened the week on edge Monday, with investors weighing a looming US midterm vote, a possible breakthrough with Iran over the Strait of Hormuz and growing bets on another Federal Reserve rate hike.
Analysts warned that the election result could shape the room for maneuver enjoyed by the Trump administration, and that the White House might push military tensions with Iran higher still. Even so, traders held on to a measure of optimism that Washington and Tehran could strike a deal through intermediaries to fully reopen the Strait of Hormuz, encouraged by recent statements from Iran.
That hope pulled December-delivery Brent crude down 3.2% to $109 a barrel.
Fed hike odds top 70%
Fresh data pointed to stubborn US inflation risks. Robust economic activity and fast-rising prices have strengthened expectations that the Fed will tighten policy further. Money markets put the odds of one more rate increase before year-end at more than 70%, and the coming nonfarm payrolls report is expected to sharpen those bets.
Corporate earnings are also in focus, led by Apple, whose results will be closely read for signs of how artificial intelligence (AI) and technology spending are affecting profitability.
The yield on the 10-year US Treasury note was flat at 4.94% at Monday’s open, after sliding for a third straight week on AI-related worries. The US dollar index held in a sideways range at 101.9.
Gold swings, Wall Street rebounds
Gold plunged 3.6% to $3,870 per ounce on Oct. 30 under pressure from renewed monetary tightening worldwide. It recovered some ground Monday, rising 0.6% to $3,899 per ounce on bargain buying.
On Oct. 30, the S&P 500 dropped 1.82%, the Nasdaq Composite shed 2.86% and the Dow Jones Industrial Average slipped 1.09%. US indexes began the new week on a positive footing.
Europe: unrest and rate pressure
Civil unrest in France topped the European agenda. Student unions urged high school pupils to resume sit-ins after Paris’ education commitments fell short of expectations.
The European Central Bank (ECB) looked increasingly likely to lift rates next month as energy prices in Europe stay stubbornly high.
Speaking at a summit, European Commission President Ursula von der Leyen said the EU and Canada could build a partnership closer to membership than their earlier ties. European Council President Antonio Costa said the bloc wanted to create something new to define its relationship with Canada, covering everything short of full EU membership.
European equities lacked direction on Oct. 30 and opened Monday mixed.
Asia: PMIs signal cooling demand
Near Monday’s close, Asian equity markets were trading higher, with Japan the exception. Manufacturing Purchasing Managers’ Index (PMI) readings across the region pointed to softer economic demand.
Japan’s October manufacturing PMI was unchanged at 53.3, China’s stood at 52 and India’s slipped to 54.7.
Japan’s Nikkei 225 slid 0.1%, while South Korea’s Kospi surged 2.6%. China’s Shanghai Composite gained 0.6%, as did Hong Kong’s Hang Seng.
Analysts warned that the election result could shape the room for maneuver enjoyed by the Trump administration, and that the White House might push military tensions with Iran higher still. Even so, traders held on to a measure of optimism that Washington and Tehran could strike a deal through intermediaries to fully reopen the Strait of Hormuz, encouraged by recent statements from Iran.
That hope pulled December-delivery Brent crude down 3.2% to $109 a barrel.
Fed hike odds top 70%
Fresh data pointed to stubborn US inflation risks. Robust economic activity and fast-rising prices have strengthened expectations that the Fed will tighten policy further. Money markets put the odds of one more rate increase before year-end at more than 70%, and the coming nonfarm payrolls report is expected to sharpen those bets.
Corporate earnings are also in focus, led by Apple, whose results will be closely read for signs of how artificial intelligence (AI) and technology spending are affecting profitability.
The yield on the 10-year US Treasury note was flat at 4.94% at Monday’s open, after sliding for a third straight week on AI-related worries. The US dollar index held in a sideways range at 101.9.
Gold swings, Wall Street rebounds
Gold plunged 3.6% to $3,870 per ounce on Oct. 30 under pressure from renewed monetary tightening worldwide. It recovered some ground Monday, rising 0.6% to $3,899 per ounce on bargain buying.
On Oct. 30, the S&P 500 dropped 1.82%, the Nasdaq Composite shed 2.86% and the Dow Jones Industrial Average slipped 1.09%. US indexes began the new week on a positive footing.
Europe: unrest and rate pressure
Civil unrest in France topped the European agenda. Student unions urged high school pupils to resume sit-ins after Paris’ education commitments fell short of expectations.
The European Central Bank (ECB) looked increasingly likely to lift rates next month as energy prices in Europe stay stubbornly high.
Speaking at a summit, European Commission President Ursula von der Leyen said the EU and Canada could build a partnership closer to membership than their earlier ties. European Council President Antonio Costa said the bloc wanted to create something new to define its relationship with Canada, covering everything short of full EU membership.
European equities lacked direction on Oct. 30 and opened Monday mixed.
Asia: PMIs signal cooling demand
Near Monday’s close, Asian equity markets were trading higher, with Japan the exception. Manufacturing Purchasing Managers’ Index (PMI) readings across the region pointed to softer economic demand.
Japan’s October manufacturing PMI was unchanged at 53.3, China’s stood at 52 and India’s slipped to 54.7.
Japan’s Nikkei 225 slid 0.1%, while South Korea’s Kospi surged 2.6%. China’s Shanghai Composite gained 0.6%, as did Hong Kong’s Hang Seng.
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