Last week, US inflation data came in better than expected and showed a slowdown.
This reaffirmed investor confidence and their bets on the end of the monetary tightening cycle and a possible initial rate cut for the first quarter of 2024 in the United States.
As a result, financial markets posted significant gains, with the Nasdaq100 approaching its all-time high from two years ago.
Oil prices continue to decline for the fourth consecutive week, causing the oil market to fluctuate rapidly.
Traders expect the market to be less tense than expected, and those fears have already been confirmed with last week’s increase in weekly US inventories of 3.6 million barrels (versus a forecast of 2.5 million). millions).
However, this drop in prices could push OPEC, particularly Saudi Arabia, to further reduce production to support crude oil prices.
Riyadh is expected to expand its production quotas by about 1 million barrels per day next year and will meet in Vienna on November 26 along with the other members of the oil organization.
Although oil prices remain below expectations, industrial metals are generally stable in London, with the exception of nickel, which continues to fall to $16,900.
Zinc, for its part, is rising to reach $8,165, while zinc ($2,570) and lead ($2,270) continue to remain at current levels. Recent Chinese statistics have contributed to price strength: in fact, industrial production rose 4.6 percent year-on-year in October, slightly exceeding forecasts of 4.5 percent.
It is also performing well as bond yields fall, which pleases investors: once again the precious metal is approaching $2,000 an ounce.
When will interest rates be reduced?
This question now has a clearer answer after the latest Consumer Price Index report.
With inflation remaining stable, it seems increasingly likely that the economy is undergoing a slowdown.
The US core CPI stood at +4.0 percent year-on-year, slightly below the initial forecast of +4.1 percent.
As a result, bond yields fell 18 basis points.
Many analysts believe inflation will decline rapidly and return below the Federal Reserve’s targets by the first half of 2024, accompanied by strong corporate earnings.
Despite inflation, U.S. producer prices and industrial production were below expectations in October, weighing on market sentiment about upcoming rate decisions.
However, strength in retail sales and the Empire State Index contributed to the rally.
In China, the data is mixed: a small recovery in consumption but a persistent crisis in the real estate sector.
This week will be important for financial markets, with several economic and corporate events that will attract the attention of investors.
On Tuesday, the Federal Reserve will release minutes from its latest meeting, while Wednesday will focus on October durable goods orders.
On the corporate front, investors will be looking forward to Nvidia’s (NASDAQ 🙂) results due Tuesday evening that could be influential in hitting new yearly highs.
Since Friday I have been buying steadily as part of my investment portfolio.
The market is confident in an upcoming rate cut