The British Pound (GBP) is outperforming as the strongest major currency with the Australian Dollar (AUD) lagging, while the U.S. Dollar (USD) exhibits mixed performance. This comes as U.S. bond yields rise, reflecting market expectations for sustained high-interest rates driven by a robust U.S. economy. The Federal Reserve Chair has hinted at a tighter monetary policy, but increasing market interest rates may diminish the necessity for central bank intervention.
Crude oil prices have seen a downturn amidst ongoing Israeli airstrikes in Gaza, following an earlier surge in U.S. crude prices due to concerns about potential supply disruptions from an escalating Israel-Hamas conflict. In contrast, Bitcoin is trading higher while gold and silver prices are experiencing a decline.
U.S. stocks have been on a downward trend for the fifth consecutive day, with NASDAQ and S&P indices down for four days. Futures for the Dow Industrial Average, S&P index, and NASDAQ all imply declines. This week will witness earnings reports from major companies including Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Meta (NASDAQ:META), Amazon (NASDAQ:AMZN), Phillips, Logitech (NASDAQ:LOGI), Coca-Cola (NYSE:KO), and Verizon (NYSE:VZ).
Economic data set to be released this week include third-quarter GDP growth figures and the core personal consumer expenditures price index. Concurrently, both European equity markets and Asia Pacific markets are trading lower.
The U.S. debt market is witnessing higher yields due to substantial U.S. borrowing contributing to the fiscal 2023 budget deficit. Changes in yield curve steepness are evident in the 2 – 10-year spread and the 2 – 30-year spread. European benchmark 10-year yields are also trading higher.
Amidst these developments, the Federal Reserve is expected to announce a rate decision soon. High concerns persist over a potential Israeli ground invasion of Gaza which could further impact the oil supply.
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