At Wednesday’s close, the Dow Jones (US30) was down 0.70%, while the S&P 500 (US500) was down 0.19%. The NASDAQ Technology Index (US100) closed positive 0.14%. Rising shares of chip and artificial intelligence infrastructure companies boosted technology stocks and supported the NASDAQ (US100) Index.

The US new home sales for August fell by 4.7% m/m to 716,000, below expectations of 700,000. Markets await inflation news on Friday when the Fed’s preferred inflation gauge, the US core PCe Price Index, is released. Consensus expects the core PCE Price Index to come in at 0.2% m/m and 2.7% y/y in August, with the year-over-year figure rising slightly. Investors now await final US GDP data, weekly jobless claims, and speeches from key Federal Reserve officials later during the day to gain more insight into the US Central Bank’s monetary policy stance.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 1.28%, France’s CAC 40 (FR40) closed 1.72% higher, Spain’s IBEX 35 (ES35) Index gained 1.27%, and the UK’s FTSE 100 (UK100) closed up 0.41%.

The GfK Consumer Climate Indicator for Germany rose to 21.2 in October 2024 from a marginally revised 21.9 in the prior period. Consumer sentiment remains fragile due to several unfavorable factors, such as high inflation, rising unemployment, increasing corporate bankruptcies, and potential job cuts at many companies.

The Swiss National Bank (SNB) will hold a monetary policy meeting today. With a probability of almost 60%, the SNB is expected to cut the rate by 0.25%. With a probability of 40%, the SNB is expected to cut the rate by 0.5 %. Expectations of a larger rate cut have increased since early August when the Swiss franc rose sharply against the US dollar and the euro. This has become a problem for Swiss exporters. It should be noted that although the country’s inflation rate is now at 1.1%, recent data shows a slow and gradual rise in consumer prices. In addition, the country’s GDP is also in positive territory. Therefore, it does not make sense for the SNB to rush into a sharp rate cut, especially since the swaps market is predicting a rate cut of almost another 50 bps over the next 12 months. Nevertheless, a 25bp rate cut on Thursday could put pressure on the Swiss franc.

Brent crude oil prices fell to $71 per barrel on Thursday, extending a decline of more than 2% from the previous session. The drop followed news that top exporter Saudi Arabia is lowering its oil price target as it prepares to increase production. In addition, Libya’s rival factions agreed on the process of appointing a Central Bank governor, which could ease the oil revenue crisis and restore exports.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was down 0.19%, China’s FTSE China A50 (CHA50) was up 1.55%, Hong Kong’s Hang Seng (HK50) added 0.68%, and Australia’s ASX 200 (AU200) was negative 0.19%.

The offshore yuan exchange rate rose to 7.01 per dollar thanks to positive investor sentiment following reports that more stimulus measures may be introduced to combat slowing economic growth in China, the world’s second-largest economy. China is reportedly considering injecting up to 1 trillion yuan into its largest state-owned banks to boost their ability to support economic activity, which would be the first such injection.