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Date: 9th December 2024.


Stocks Cautious Amid Rate Cuts for Christmas; Geopolitical Unrest.



Trading Leveraged Producys is Risky


Investors entered the week with caution as geopolitical unrest, spanning from Syria to South Korea, cast a shadow over the global economic outlook. This cautious tone comes as investors prepare for a week shaped by central bank announcements, a pivotal Chinese policy meeting, and US inflation data.


Asia & European Sessions:


*The global market impact of Syrian President Bashar al-Assad’s overthrow remained uncertain. Assad’s removal has created a power vacuum, further destabilizing an already volatile region. Assad, whose family ruled Syria for five decades, fled to Moscow after rebels toppled his regime. Meanwhile, oil prices showed mixed movement, and US stock futures inched downward.
*South Korea: political tensions escalated as reports emerged that authorities were considering restricting President Yoon Suk Yeol’s international travel. This development followed his brief declaration of martial law during a budget dispute, which he later rescinded.
*Asian shares were largely down on Monday, with South Korea’s index tumbling 2.6% and the Asian equity index dropping 0.3% overall, following a record-breaking performance in US markets last week.
*Chinese markets also weakened after data highlighted sluggish demand recovery in the world’s second-largest economy. The CPI in November decelerated to 0.2%, the lowest since June, while factory deflation extended into a 26th straight month painting a mixed picture of the effects of recent stimulus efforts on the economy.
*This week: A much anticipated ECB meeting headlines this week with another -25 bp cut widely expected. Additionally, the SNB is seen delivering a -25 bp reduction. And the BoC is in easing mode too, with increased odds for another -50 bps, while RBA is likely to hold rates steady as the country’s economy shows signs of cooling. In the US a solid jobs report did not dissuade expectations for a quarter point reduction next week, though the CPI will help solidify outlooks.





Financial Markets Performance:


*Currency markets reflected the geopolitical unease and the resilient US economy, with the USDindex strengthening as a safe-haven asset, at 106.50.
*The Euro and Turkish lira slid, partly influenced by the upheaval in Syria, expectations of further monetary easing by the ECB and the broader risk-off sentiment.
*Oil climbed to $67.60 as traders reacted to Saudi Arabia’s deeper-than-expected cuts to crude prices for Asia and speculated on the potential economic fallout from the collapse of Syria’s Assad regime.
*Gold gapped up this morning, ending a 6-month hiatus and signaling renewed interest in diversifying reserves. Gold rose after China’s central bank added bullion to its reserves for the first time in seven months, and the rapid fall of the Syrian government further destabilized the Middle East. It is currently traded at $2650.


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Please note that times displayed based on local time zone and are from time of writing this report.


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HFMarkets

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