InvestMacro

The Dow Jones Index (US30) fell by 0.48% at the close on Monday. The S&P 500 Index (US500) rose by 0.17%. The technology-heavy Nasdaq Index (US100) closed higher by 0.46%. US stock indices received support on Monday amid continued optimism surrounding artificial intelligence following the report that OpenAI purchased $38 billion worth of AI computing capacity from Amazon. Markets also reacted to a number of dovish comments from Federal Reserve officials. Federal Reserve Board Governor Stephen Miran stated that the Fed’s current policy is “too tight” and above the neutral rate level, adding that he sees no need to maintain such a restrictive stance given a more moderate outlook on inflation. Lisa Cook also noted that the risks of the labor market weakening now outweigh the risks of accelerating inflation. According to the futures market, investors are pricing in an approximately 66% chance of a December rate cut of 25 basis points (bps).

Investors are also preparing for a US Supreme Court hearing on Wednesday regarding the legality of President Trump’s “reciprocal tariffs.” Lower courts had previously ruled these tariffs illegal. If the Supreme Court upholds this decision, the US could face the necessity of repaying over $80 billion in collected tariffs, and the White House’s authority to impose tariffs would be restricted to only existing sections of trade law.

European stock markets were mostly up on Monday. Germany’s DAX (DE40) rose by 0.73%, France’s CAC 40 (FR 40) closed down by 0.14%, Spain’s IBEX 35 (ES35) increased by 0.03%, and the UK’s FTSE 100 (UK100) closed negative 0.16%. Sectorally, car manufacturers made the largest contribution: shares in Mercedes-Benz, Volkswagen, BMW, and Stellantis rose by 0.9-2.3% following statements from China about the possible granting of exceptions for the export of Nexperia chips, which are vital for automotive electronics.

WTI crude oil prices fell to $60.8 per barrel on Tuesday after four days of gains, as markets continued to assess oversupply risks despite the OPEC+ decision to freeze production increases early next year. The group of producers agreed to a moderate production increase in December, but further growth will be frozen from January to March due to a seasonal decline in demand. The decision comes amid expectations that the oil market may face a supply surplus in 2026 due to expanded supplies from both OPEC countries and non-OPEC producers.

Platinum is trading near $1570 per ounce, correcting from its mid-October peak of around $1722, as demand for safe-haven assets weakened following the US-China trade agreement and amid a stricter tone from the Federal Reserve. Despite the correction, platinum has risen by nearly 60% since the start of the year, outperforming gold and silver, thanks to limited supply and high industrial demand, primarily from the auto industry and hydrogen technologies. Traders are also anticipating the potential launch of platinum futures trading in China, which could boost market liquidity.

Asian markets traded with mixed dynamics last week. Japan’s Nikkei 225 (JP225) rose by 2.12%, China’s FTSE China A50 (CHA50) increased by 0.16%, Hong Kong’s Hang Seng (HK50) rose by 0.97%, and Australia’s ASX 200 (AU200) showed a positive result of 0.15% yesterday. In the first ten months of 2025, 80 IPOs were registered in Hong Kong, highlighting the resilience of the local capital market.

The Australian dollar weakened to below 0.652 USD, marking its fifth consecutive day of decline after the Reserve Bank of Australia (RBA) left the cash rate unchanged, fully aligning with market expectations. At the November meeting, the RBA Board unanimously voted to keep the official cash rate at 3.60%, declining to consider a further rate hike despite persistent inflationary pressure. The regulator also downplayed the unexpected rise in unemployment in September, noting that the labor market remains “slightly tight.” RBA Governor Michele Bullock stressed that the potential for further rate cuts is limited and that the scale of the forthcoming easing may be smaller than in previous cycles.

The New Zealand dollar reached a nearly 7-month low amid growing expectations of further interest rate cuts by the Reserve Bank of New Zealand (RBNZ). Markets have almost fully priced in a 25 bps rate cut at the late-November meeting, following the 50 bps reduction that already occurred last month, against the backdrop of weak economic activity and slowing inflation. Investors are now awaiting the release of Q3 labor market data. Unemployment is expected to rise to a near nine-year high, which could further strengthen the case for more policy easing

By the end of Friday, the Dow Jones Index (US30) rose by 0.09% (for the week +0.32%). The S&P 500 Index (US500) gained 0.26% (for the week, 0.08%). The Technology Index Nasdaq (US100) closed higher by 0.48% (for the week +0.61%). AMZN shares jumped over 10% after reporting that third-quarter cloud revenue increased by 20% and exceeded analyst expectations. This supported the entire technology sector. Positive momentum was also observed in companies related to the development of artificial intelligence: Palantir and Oracle shares added 3% and 2.8%, respectively. Netflix rose by 2.9% on news of a planned 10-for-1 stock split, while Tesla gained 3.1%.

The Canadian dollar fell below the 1.40 per USD mark following the release of a surprisingly weak GDP report, which fueled market expectations of a potential rate cut by the Bank of Canada. Canada’s GDP in September is expected to have grown by 0.1% month-over-month, while the August figure was revised down to 0.3%, the largest drop since December 2022. The weak data reflects the consequences of trade frictions with the US and the negative impact of higher Bank of Canada rates.

European stock markets mostly declined on Friday. Germany’s DAX (DE40) fell by 0.67% (for the week -1.54%), France’s CAC 40 (FR40) closed lower by 0.44% (for the week -1.41%), Spain’s IBEX 35 (ES35) dropped by 0.05% (for the week +0.72%), and the UK’s FTSE 100 (UK100) closed negative 0.44% (for the week +0.74%). Investors were taking profits and evaluating a busy week during which markets processed a significant volume of corporate earnings, macro statistics, and central bank decisions. The situation surrounding the one-year technology and trade truce between the US and China remained an additional factor of uncertainty. Focus also remained on the upcoming Bank of England meeting. A broad consensus suggests keeping the rate unchanged, but expectations of possible policy easing are already beginning to intensify.

Eight key OPEC+ participants are likely to approve another increase in the collective target oil production level by 137 thousand barrels per day. This would be the ninth consecutive monthly increase for Saudi Arabia, Iraq, Kuwait, Russia, UAE, Algeria, Oman, and Kazakhstan. The meeting takes place against the backdrop of recently imposed US sanctions against Russian oil companies Rosneft and Lukoil, creating uncertainty about Russia’s ability to maintain current production and export volumes. The group emphasized that it will approach the monthly production increase flexibly, adjusting it according to market conditions.

The US natural gas prices (XNG/USD) rose above $4.1 per MMBtu, reaching a seven-month high, amid a combination of increased demand for heating and projections of active LNG exports to Europe and Asia. Expectations of colder weather leading into the winter season have boosted gas consumption for heating.
Asian markets traded without a unified direction last week. Japan’s Nikkei 225 (JP225) rose by 5.02%, China’s FTSE China A50 (CHA50) fell by 1.59%, Hong Kong’s Hang Seng (HK50) dropped by 1.03%, and Australia’s ASX 200 (AU200) showed a negative result of 1.94%.

On Monday, the offshore yuan held near 7.12 per USD after two consecutive days of weakening. The private manufacturing PMI for October declined more than expected, continuing the negative trend confirmed by official statistics last week, which indicated that the industry’s downturn was the longest in nine years. Weak macro statistics once again amplified expectations of additional government support. On the trade front, China agreed to suspend new export control measures on rare earth metals and cease investigations into US semiconductor manufacturers. In response, the US will suspend a range of tariffs and forgo the planned 100% duty tax on Chinese exports.

On Wednesday, US stock indices showed mixed performance. The Dow Jones (US30) Index fell by 0.16%. The S&P 500 (US500) declined by 0.01%. The technology-heavy Nasdaq (US100) closed higher by 0.55%. The Federal Reserve announced a 25 basis point (bps) cut to the federal funds rate, bringing it to 4.00% at its October 2025 meeting, a move that fully aligned with market expectations. This was the second consecutive cut after the September decision. The regulator noted increasing risks in the labor market in recent months, while inflation has accelerated since the start of the year and remains relatively elevated. During the press conference, Chairman Jerome Powell stressed that a rate cut in December is not guaranteed, although investors still price in a high probability of another 25 bps move, consistent with the Fed’s September forecasts. Additionally, the central bank announced that the reduction of its balance sheet (Quantitative Tightening) will conclude on December 1st.

The Bank of Canada (BoC) cut its rate to 2.25% and signaled a potential pause in the easing cycle. The regulator indicated that the easing cycle is likely nearing its end, provided the baseline economic forecast remains unchanged amidst ongoing uncertainty. The Governing Council noted that trade conflict has caused structural damage to the economy, reducing its potential, which aligns with the 1.6% year-over-year GDP decline in the second quarter.

G7 nations plan to establish a critical minerals alliance to counter China’s dominance in global supply chains. The alliance aims to reduce China’s market influence, including its practice of dumping to push out Western projects and the imposition of export controls. Canada, in particular, expects economic benefits, leveraging its domestic resource base and ready-to-go infrastructure projects.

European stock markets traded with mixed dynamics yesterday. Germany’s DAX (DE40) fell by 0.64%, France’s CAC 40 (FR40) closed down 0.19%, Spain’s IBEX35 (ES35) gained 0.39%, and the UK’s FTSE 100 (UK100) closed 0.61% higher. Contradictory corporate results amplified uncertainty regarding the region’s economic outlook. The banking sector was the leader of the gains: Santander added 4% after publishing a record nine-month profit, and Deutsche Bank rose by 5% on strong investment division results. Mercedes-Benz climbed 4.3% as growth in premium segment sales ensured margin expansion and compensated for a decline in China revenue.

Today, the ECB will hold its monetary policy meeting. There is an almost 99% probability that the interest rate will remain unchanged at 2.15%. This stands in contrast to the situation at the US Federal Reserve (Fed).

WTI crude oil prices rose on Wednesday to around $60.6 per barrel due to a reduction in inventories. According to the EIA, US crude oil stocks fell by 6.9 million barrels, a more significant drop than expected. Gasoline and distillate inventories also decreased, while stocks at the Cushing, Oklahoma, hub increased. Indian refineries temporarily halted new purchases pending official instructions, though the state-owned IOC confirmed it would continue imports under contractual obligations. However, some analysts doubt that the sanctions will lead to a significant supply reduction, given reports that OPEC+ may consider another production increase at its next meeting to stabilize the market.

Asian markets also traded with mixed results yesterday. Japan’s Nikkei 225 (JP225) surged 2.17%, China’s FTSE China A50 (CHA50) gained 0.10%, Hong Kong’s Hang Seng (HK50) fell by 0.33%, and Australia’s ASX 200 (AU200) posted a negative result of 0.96%.

The Bank of Japan (BoJ) kept its key short-term rate at 0.5%, holding borrowing costs at their highest level since 2008 and extending the pause after the January hike. The regulator reiterated its readiness to tighten policy further if the economy evolves within its outlook. In its quarterly projections, the BoJ maintained its core inflation estimate for the 2025 fiscal year at 2.7%, expecting it to slow to 1.8% in 2026. The GDP growth forecast for 2025 was improved from 0.6% to 0.7%, facilitated by a new trade agreement with the US and the policies of Prime Minister Sanae Takaichi’s cabinet.