Global Markets Review: US Inflation Data and Federal Reserve’s Final Rate Decision

2023-12-11 17:31:00

(Photo: The Canadian Press)

MARKET REVIEWS. Global markets were mostly higher on Monday, at the start of a week that will be marked by crucial US inflation data and the US Federal Reserve’s final interest rate decision of the year. .

Stock market indices at 7:30 a.m.

In Toronto, the S&P/TSX rose 154.76 points (+0.80%) to 19,590.74 points.

In New York, the S&P 500 gained 25.19 points (+0.59%) to 4299.70 points.

The Nasdaq advances by 108.43 points (+0.83%) to 13,201.28 points.

The DOW increased by 116.07 points (+0.35%) to 33,666.34 points.

The loonie rose by US$0.0013 (+0.18%) to US$0.7423.

Oil decreased by US$1.87 (-2.00%) to US$91.81.

L’or perd 9,20$US (-0,49%) à 1881,70$US.

Bitcoin advances by US$759.28 (+2.89%) to US$27,018.29.

The DAX German remained relatively stable, while the CAC 40 in Paris gained 0.2%. In London, the index FTSE 100 was down 0.4%.

In New York, before the markets opened, the average Dow Jones industrial stocks and the broader index S&P 500 slipped by 0.1%.

The Fed will announce its next interest rate decision on Wednesday. On Tuesday, the US government will report on consumer inflation in the United States.

In Asia, Hong Kong lost 0.8%, while Shanghai gained 0.7%.

The index Nikkei 225 of Tokyo gained 1.5% and the Kospi of Seoul gained 0.3%. Eventually, Sydney increased by 0.1%.

On the New York Commodity Exchange, the price of oil took 24 cents, to stand at US$71.47 per barrel.

The context

Wall Street indexes are also heading toward a near-balance open, according to their futures contracts.

Investors on Friday welcomed higher-than-expected U.S. employment figures and a rebound in U.S. consumer sentiment, statistics that reinforced the view that the U.S. economy might avoid recession while still seeing inflation coming back under control.

From now on, the markets are turning to the central banks, with the American Federal Reserve (Fed) which will announce its decision on Wednesday concerning the evolution of its key rates at the end of its meeting. Then, on Thursday, it will be the turn of the European Central Bank (ECB), the Bank of England (BoE) as well as the central banks of Switzerland and Norway to do the same.

This week’s central bank meetings “should play a crucial role in managing expectations around the timing and pace of rate cuts that markets can expect,” said CMC Markets analyst Michael Hewson.

For several weeks and the publication of new figures showing a slowdown in inflation, the markets have been hoping to see central banks lower their key rates from the first half of 2024.

The Fed’s “economic forecasts” and the table describing “where decision-makers think key rates will be in 2024” will be particularly scrutinized by the markets, underlines Neil Wilson, analyst at Finalto.

Also on the agenda is Tuesday’s publication of the Consumer Price Index (CPI) for November in the United States.

On the bond market, interest rates on sovereign debt remain stable. That of the ten-year United States bond stood at 4.27%, compared to 4.23% at Friday’s close.

On Asian equity markets, Hong Kong lost 0.81%. Deflation in China accelerated in November, driven by falling energy and food prices, and producer prices also fell, official data showed.

Solvay split

Solvay shareholders approved on Friday the separation of the Belgian chemical group into two independent companies, the new Solvay and Syensqo.

The title of Solvay (SOLB.BR) fell 27.25% in Brussels, while the brand new title of Syensqo climbed 11.80%. Their two prices added together are equivalent to the value of Solvay shares from Friday to closing.

TikTok turns to Indonesia

Chinese social media champion TikTok announced on Monday that it will invest US$1.5 billion in GoTo Group to take over its e-commerce business in Indonesia.

As part of the deal, TikTok Shop will merge with GoTo-owned Tokopedia, and TikTok will own a majority stake in that entity. GoTo shares lost more than 20% on the Jakarta Stock Exchange.

On the side of oil and currencies

On the oil market, the price of a barrel of North Sea Brent, for delivery in February, lost 0.13% to 75.74 US dollars ($US) around 07:45 GMT. And its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in January, fell 0.60% to US$70.79.

On the foreign exchange market, the yen fell 1% to 146.41 yen per dollar, as recent speculation regarding a more restrictive Bank of Japan (BoJ) policy from its next monetary decision on December 19 dissipated. .

L’euro was stable (-0.04%) at US$1.0759 per euro.

The bitcoin fell 3.60% to US$42,225.

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