What Drove the Markets
Markets adopted a cautious risk-off stance as delayed US economic data, weakening global growth expectations, and persistent government funding uncertainty dampened sentiment. Federal Reserve officials nudged December rate cut probabilities higher, reinforcing a "slower-growth, easier-policy" narrative whilst stopping short of signalling an aggressive easing cycle. Meanwhile, emerging progress in Ukraine–Russia peace negotiations influenced movements across bonds, energy markets, and European assets.
Market Reactions – FX Market Major Changes
- US Dollar: The US dollar index consolidated near a one‑month high, holding above key technical resistance as strong prior jobs data and tempered Fed cut expectations kept the greenback underpinned.
- Euro & Sterling: The euro stayed under pressure amid weak European data and cautious European Central Bank communication, while sterling slid toward recent lows as markets priced a high probability of a Bank of England cut in December.
- Yen & Commodity FX: The Japanese yen rallied into the weekend partially reversing its recent slide. Commodity currencies such as NOK and AUD softened with weaker risk appetite and lower energy prices, while the Canadian dollar weakened as USD/CAD broke above key levels.
Market Reactions – Commodities Market Major Changes
- Precious Metals: Gold held firm in a tight range around USD 4,000–4,100, while silver traded mid‑range with upside capped by recent technical resistance.
- Energy: The Bloomberg Commodity Total Return Index slipped 1.4% on the week, led by energy as crude and refined fuels fell on talk of a Ukraine–Russia peace deal potentially adding barrels to already ample supply and easing product tightness. Brent remained capped below USD 65, with bulls struggling to justify higher prices in the near term.
- Agriculture & Base Metals: Agricultural markets declined around 0.7%, with cocoa, cattle, corn and coffee weighing on the complex, while copper and other industrial metals held above key supports but failed to break higher amid uncertain Chinese demand.
Market Reactions – Indices Market Major Changes
- US Equities: US indices were lower, as investors balanced rising rate‑cut expectations with concerns over earnings quality, high valuations in artificial‑intelligence beneficiaries, and the overhang from delayed data releases.
- Europe: European benchmarks underperformed, dragged down by energy names and European energy equities, which tracked falling oil and gas prices and added to broader weakness in regional indices.
- Asia‑Pacific: Asian markets were subdued, with Chinese and Hong Kong equities constrained by lacklustre growth signals and Japan seeing choppy trade as the yen strengthened and local sentiment adjusted to evolving global policy expectations.
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