Asia’s main stock index was trading within a narrow range on Monday, while gold reached a record high due to heightened tensions in the Middle East, leading to increased demand for the precious metal as a safe haven.
Australian stocks saw gains, while Japanese equities slipped and Hong Kong equity futures indicated potential declines. Meanwhile, US futures were on the rise following the S&P 500’s sixth consecutive weekly increase, marking its longest winning streak of the year. This positive trend was driven by a series of corporate results and indications that the US economy remains strong.
Market movements are currently influenced by assessments of the US and Chinese economies, as well as the impact of conflicts in the Middle East and geopolitical factors. China’s banks are expected to lower their loan prime rates on Monday after the central bank reduced its key rates at the end of September. This expected rate cut comes at a time when investors are becoming skeptical about the sustainability of the recovery in Chinese stocks despite various stimulus measures being implemented.
Chris Weston, head of research at Pepperstone Group in Melbourne, noted, “The potential impact of further easing measures on Chinese and Hong Kong equities, as well as the yuan, is still uncertain, as market participants may be experiencing policy fatigue.”
Silver, palladium, and platinum prices all increased, with gold hitting an all-time high of around $2,725 an ounce following reports of Israel discussing military actions against Iran after a Hezbollah drone incident near Prime Minister Benjamin Netanyahu’s residence. Crude oil prices remained relatively stable after experiencing an 8.4% drop the previous week.
Concerns about escalating tensions in the Middle East coincide with the gathering of finance ministers and central bank governors in Washington this week for the annual meetings of the International Monetary Fund and World Bank. The ongoing Russia-Ukraine conflict and the upcoming US presidential election, which could have significant economic implications, are key topics of discussion.
Bitcoin approached the $70,000 mark, a level not seen since June, as demand for dedicated US exchange-traded funds surged.
In Malaysia, politicians are preparing for potential protests following the decision to phase out fuel subsidies starting next year, which could lead to increased inflation. Traders are also closely monitoring the Indonesian rupiah after President Prabowo Subianto confirmed the reappointment of Sri Mulyani Indrawati as finance minister, signaling policy continuity in Southeast Asia’s largest economy.
The decision to retain Indrawati in Prabowo’s administration is viewed positively by markets in terms of Indonesia’s medium-term fiscal consolidation efforts, according to analysts at Barclays Plc.
In terms of US earnings this week, Tesla Inc. is facing questions regarding its production targets and regulatory challenges after the underwhelming response to the Cybercab unveiling failed to alleviate concerns about recent vehicle sales. Boeing Co. is also under pressure to address concerns about production delays, financial constraints, and labor disputes. Workers will vote on October 23 to ratify a tentative agreement on a new contract reached between the company and their union over the weekend, which includes a 35% wage increase spread out over four years.
Investors are positioning themselves for the upcoming US election in two weeks, with increasing odds of Donald Trump winning the presidency and Republicans retaining control of Congress. Traders are adjusting their portfolios to reflect potential outcomes, especially in terms of trade policies.
Key market movements:
Stocks:
– S&P 500 futures rose by 0.1% as of 8:59 a.m. Tokyo time
– Hang Seng futures fell by 0.4%
– Australia’s S&P/ASX 200 index increased by 0.7%
Currencies:
– The Bloomberg Dollar Spot Index remained relatively stable
– The euro was unchanged at $1.0868
– The Japanese yen was steady at 149.60 per dollar
– The offshore yuan held steady at 7.1163 per dollar
Cryptocurrencies:
– Bitcoin rose by 0.4% to $69,027.12
– Ether increased by 1.3% to $2,746.97
Bonds:
Commodities:
This article was created with the help of Bloomberg Automation.
–Assisted by Matthew Burgess and Chris Bourke.
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