The calm before the storm! Last week's sharp drop in the panic index did not bring a good start. On the contrary, on Monday (November 27th), the global market opened with a cautious tone. European stocks began to decline, while US stock futures came under pressure. Gold easily broke the 2010 mark in this atmosphere, while crude oil waited anxiously for the postponed OPEC+meeting. This week, key data from both China, the United States, and Europe has been released. In addition, Federal Reserve Chairman Powell, along with at least seven officials, will deliver speeches one after another, giving investors a further understanding of the central bank's interest rate hike path.
Global stock markets remained largely unchanged on Monday, with the US dollar falling and gold prices climbing to a six month high. Currently, investors are waiting for the release of key inflation data for the United States and Europe later this week.
The Morgan Stanley Capital International (MSCI) global stock index is currently down 0.06%, after four consecutive weeks of gains, with a cumulative increase of about 8.7% so far this month.
The Stoxx 600 index fell 0.3%, the German DAX index fell 0.12%, and the UK FTSE 100 index fell 0.2%.
US stock futures are under pressure, with S&P 500 index futures falling 0.18% and Nasdaq futures falling 0.2%.
Panic index plummets, market still starts cautiously
In recent weeks, as bond yields have declined and global stock markets have risen significantly, the cooling inflation in developed economies has strengthened investor expectations that central banks around the world have ended raising interest rates and may soon lower them.
Despite the VIX index, known as the "fear indicator" of Wall Street, falling to its lowest level since January 2020 last week, investors still opened cautiously. More and more people believe that the Federal Reserve (Fed) and European Central Bank (ECB) are unlikely to further raise interest rates, which has boosted the market.
Duncan MacInnes, head of investment at investment firm Ruffer, said, "The minutes of the Federal Reserve meeting (released last week) revealed what everyone already knew: that, at least for now, they have ended or paused... so both the stock and bond markets are rising."
He added, "We were forced to raise interest rates by about 500 basis points... do we really think this won't have any consequences? The market seems to be saying that."
This week, major events between China, the United States, and Europe have been ongoing
The latest economic data released this week will help traders determine whether the gains in the stock and bond markets so far this month can continue until December. The data includes Thursday's Eurozone inflation data, China's PMI and US individual consumer data, as well as Friday's US and Eurozone PMI, which may provide direction for the market after last week's Thanksgiving lull.
Federal Reserve Chairman Jerome Powell will have the opportunity to refute the dovism in Friday's fireside talks, and at least seven Federal Reserve officials will speak this week.
Christine Lagarde, the President of the European Central Bank, does not sound eager to relax monetary policy. Later on Monday, she will have another opportunity to convey this message to the European Parliament.
The yield of 10-year US treasury bond bonds climbed 5 basis points to 4.51%, the highest level in more than a week. Since hitting a 16-year high of over 5% in October last year, the yield has fallen significantly. The yield and price trend are opposite.
"There are not many fundamental reasons for the market to be highly optimistic," said Ulrich Leuchtmann, head of forex strategy at Commerzbank in Germany. "Many of the clients I have talked to are becoming increasingly pessimistic about long-term growth prospects."
The exchange rate of the US dollar has hardly changed today. With the decline in US market interest rates, the US dollar index fell by 3.16% in November. The index fell 0.11% on Monday to the level of 103.33.
Gold Strongly Rises
Gold prices have climbed to their highest level since May, reaching a six month high of $2017.82 per ounce on Monday.
Last Friday, gold prices closed above $2000 per ounce, marking the second consecutive week of gains and enhancing market confidence in the reasonable rise in gold prices. In the second half of November, the weakening of US economic data increased expectations for the Federal Reserve to cut interest rates early next year, boosting gold prices. Investors' concerns about the conflict between Israel and Hamas have also boosted gold prices.
Oil prices fell for the fourth day in a row, and traders looked forward to the OPEC+meeting postponed this week.
OPEC+sources have stated that African oil producing countries are seeking to increase their production cap for 2024, while media reports suggest that Saudi Arabia may extend the voluntary production reduction agreement of an additional 1 million barrels per day, which will expire at the end of December.
