New York:Global markets commenced the week with caution as the US midterm elections loomed, influencing asset prices worldwide.
According to Anadolu Agency – English, analysts have suggested that the election outcomes could impact the Trump administration's maneuverability and potentially escalate military tensions with Iran. However, there remains some optimism that the US and Iran might reach an agreement through intermediaries to fully reopen the Strait of Hormuz, following recent declarations from Tehran.
Brent crude oil prices for December delivery saw a decrease of 3.2%, settling at $109 a barrel due to the potential US-Iran deal. Meanwhile, recent figures indicated that US inflation risks might persist, with strong economic activity and rapid price increases raising expectations for tighter monetary policy by the Federal Reserve. The probability of the Fed hiking rates again before year-end is over 70%, as per money market forecasts, with upcoming nonfarm payrolls data expected to influence these predictions.
Attention has also shifted to the earnings results of major corporations, notably Apple, which are crucial for assessing the effect of artificial intelligence (AI) and technology investments on profitability. The 10-year US Treasury note yield continued its third consecutive week of decline amid AI-related concerns, remaining flat at 4.94% as trading began on Monday. Concurrently, the US dollar held steady at 101.9.
Gold experienced a 3.6% drop to $3,870 per ounce on October 30 due to pressure from renewed global monetary policy tightening, but later saw a rebound, climbing 0.6% to $3,899 per ounce on Monday. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all started the new week positively, despite experiencing declines on October 30.
In Europe, civil unrest in France captured attention as French student unions encouraged high school students to continue sit-ins, following unmet educational commitments by Paris. The European Central Bank (ECB) appeared more likely to raise interest rates next month amid persistently high energy prices. At a recent summit, European Commission President Ursula von der Leyen and European Council President Antonio Costa discussed potentially forming a closer partnership with Canada, just short of full EU membership.
European stock markets exhibited mixed movements on October 30 and began the new week without a clear direction. In Asia, equity markets traded positively except in Japan, with regional Manufacturing Purchasing Managers' Index (PMI) readings indicating a slowdown in economic demand. Japan's Nikkei 225 dipped 0.1%, while South Korea's Kospi surged 2.6%, China's Shanghai Composite rose 0.6%, and Hong Kong's Hang Seng increased 0.6%.