Oil prices remain under pressure. Canada’s inflation fell to the Bank of Canada’s target level

By Monday’s close, the Dow Jones Index (US30) fell by 1.18%. The S&P 500 Index (US500) dropped 0.92%. The Nasdaq (US100) closed lower at 0.84%. The US stock market started the week with a sharp decline amid expectations of key economic data and tech company earnings. Leading the sell-off were major technology firms: Nvidia shares fell by 1.9% ahead of quarterly results, due after Wednesday’s market close, which will be an important indicator of the sustainability of AI-related valuations. At the same time, expectations for a rate cut increased. Federal funds futures now price in about a 40-45% chance of a 25 basis point cut in December, raising trader interest in employment data and other key economic releases this week.

The Canadian dollar stabilized around 1.40 per US dollar after the inflation data. The weighted core inflation measure, the Bank of Canada’s (BoC) main benchmark, fell to 3% in October but remained close to peak levels last seen in February 2024. These figures reinforced expectations that the Bank of Canada likely ended its rate-cutting cycle at the last meeting, provided the baseline scenario holds and the economy proves resilient to US tariffs, while core inflation stays above target.

Bitcoin (BTC/USD) fell nearly 2% to around $90,000, deepening a month-long sell-off that erased its yearly gains and pushed prices to their lowest in six months. The total digital assets market capitalization has shrunk by at least 30% since peaking on October 6, intensifying the decline that began earlier in the month and was accompanied by liquidations exceeding $19 billion. Reduced institutional activity and overall macroeconomic pressure, including fading expectations of a December Fed rate cut, added to the strain on Bitcoin and other high-beta assets.

European stock markets fell yesterday. Germany’s DAX (DE40) dropped 1.20%, France’s CAC 40 (FR40) closed down 0.63%, Spain’s IBEX 35 (ES35) fell by 1.06%, and the UK’s FTSE 100 (UK100) closed negative 0.24%.

In Q3, Switzerland’s GDP contracted by 0.5% after growing 0.1% in Q2. Lower tariffs partially reduced risks for the economy, while SNB officials maintained expectations of gradual inflation growth in the coming quarters. The central bank is in no hurry to cut rates below zero, fearing potential destabilization of the financial system. The Swiss franc weakened slightly to around 0.795 per US dollar but remained close to 2011 highs.

WTI crude oil prices fell to $59.4 per barrel on Tuesday, extending the previous session’s decline as oversupply concerns outweighed expectations of potential sanctions against Russian oil. The market outlook remains weak. A significant supply surplus is expected at the end of this year and into 2026, as producers inside and outside OPEC ramp up output amid slowing global demand growth.

Asian markets traded under pressure yesterday. Japan’s Nikkei 225 (JP225) fell by 0.10%, China’s FTSE China A50 (CHA50) dropped 0.83%, Hong Kong’s Hang Seng (HK50) declined 0.71%, while Australia’s ASX 200 (AU200) posted a slight gain of 0.02%.

On Tuesday, the Australian dollar moderately strengthened to $0.649, recovering part of the previous session’s losses after the Reserve Bank of Australia’s minutes emphasized caution and data dependency in future policy decisions. Earlier this month, the RBA kept rates at 3.60%. Concerns about labor market cooling proved exaggerated: October saw a sharp rise in employment and a drop in unemployment. This led to a significant reassessment of easing expectations – the probability of a rate cut in May next year is now estimated at just 40%.