Key Takeaways:
- 💵 Dollar weakened after boost from healthy U.S. economic data faded
- 📉 Dollar index fell to 100.52, on track for sixth drop in seven sessions
- 🇨🇭 Swiss franc rose as Swiss National Bank cut interest rates by 25 basis points
- 🇪🇺 Euro was up to $1.1178
- 📊 Fed’s Nov. 6-7 meeting expected to result in cut of at least 25 basis points, with a 51.3% chance for a 50 basis point cut
- 🏦 Swiss National Bank likely to make another 25-bp cut in December meeting amid lower inflationary pressure
- 💸 British companies paying highest electricity prices in developed world, leading to concerns for UK industry and calls for a switch to electricity-powered processes
- 🌍 Oil prices dropped, Saudi Arabia committed to increasing output, and Libya named new central bank governor
- 📌 Key events to watch this week: Stocks, currencies, cryptocurrencies, bonds, and commodities movements.
Dollar Weakens Against Euro and Swiss Franc
The dollar saw a weakening trend as it lost momentum following healthy U.S. economic data. The dollar index fell to 100.52, marking its sixth drop in seven sessions. On the other hand, the Swiss franc rose after the Swiss National Bank cut interest rates by 25 basis points. This move by the SNB indicated their efforts to contain the strength of the Swiss currency.
Europe Faces Gas Shortfall This Winter
Europe is bracing for a massive gas shortfall this winter due to maintenance disruptions in Norway and other factors. The shortfall, predicted to be 66 million cubic meters a day, is expected to impact UK consumption and potentially lead to higher prices for consumers. Storms in the Gulf of Mexico have further exacerbated the situation, affecting liquefied natural gas supplies. The colder temperatures forecasted for Northern and Central Europe will likely increase gas demand, putting further strain on the already tight supply situation.
Mixed Signals in the U.S. Stock Market
The U.S. stock market saw a mixed performance, with stocks climbing led by technology companies. Strong economic data and China’s fiscal stimulus pledge contributed to this positive movement. However, the S&P 500 and Nasdaq 100 trimmed gains as traders analyzed various catalysts for hints about the economy and the Federal Reserve’s future actions. Despite this, the U.S. jobless claims declining to a four-month low signaled resilience in the labor market.
Monetary Policies Impact Global Markets
Global monetary and fiscal policymakers’ clear support has contributed to positive market sentiment. Expectations of rate cuts by the Federal Reserve and the European Central Bank have boosted optimism among investors. Money markets are favoring a Fed rate cut in November, with growing expectations of a potential half-point cut. However, doubts remain about the long-term impact of China’s efforts to revive economic growth. The Swiss National Bank cutting borrowing costs and warning of more cuts to contain currency strength also added to the uncertainty in the markets.