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The Dow Jones Index (US30) closed up 0.42% on Tuesday. The S&P 500 Index (US500) declined by 0.20%. The technological Nasdaq Index (US100) closed lower by 0.69%. Speaking at the NABE meeting in Philadelphia, Fed Chair Jerome Powell acknowledged that economic activity was somewhat stronger than expected but warned of rising risks to employment. The Chair also indicated that the Federal Reserve could complete the reduction of its balance sheet in the coming months, noting that liquidity conditions are gradually tightening. He warned that procrastination risks increasing the impact of tariffs and potential job cuts, and the recent lack of key data has added uncertainty to the policy outlook.

The IMF expects a slowdown in global economic growth to 3.2% in 2025 and 3.1% in 2026, compared to 3.3% in 2024, as the world economy adapts to conditions of increased protectionism and fragmentation, according to the latest “World Economic Outlook” (WEO) report. By country, US economic growth is expected to be 2.0% in 2025 and 2.1% in 2026, while China’s economic growth rate will slow to 4.8% and 4.2%, respectively. Eurozone economic growth will be 1.2% in 2025 and 1.1% in 2026, the UK’s 1.3% in both years, and Japan’s 1.1% and 0.6%. Meanwhile, global inflation is expected to continue to decline, although trends will vary across countries: it will remain above target in the US, with risks skewed to the upside, while remaining subdued in other countries.

European indices traded mixed on Tuesday. Germany’s DAX (DE40) fell by 0.62%, France’s CAC 40 (FR 40) closed down by 0.18%, Spain’s IBEX35 Index (ES35) rose by 0.29%, and the UK’s FTSE 100 (UK100) closed up 0.10%. In France, Prime Minister Sébastien Lecornu announced plans to suspend pension reform this autumn, partially yielding to the demands of the Socialists, whose support is crucial for the government’s survival. On the corporate front, German parts manufacturer Continental showed a drop of more than 4%, following losses by the French company Michelin after the latter cut its outlook. It was followed by Siemens, which fell 3.2% after Morgan Stanley downgraded the company’s stock rating to “equal-weight” from “overweight”.

WTI crude oil prices fell 1.3% to reach $58.7 per barrel on Tuesday, recovering slightly after hitting a five-month low earlier in the session, as escalating US-China tensions and a bearish prognosis from the International Energy Agency weighed on sentiment. Beijing announced sanctions against five US-linked subsidiaries of South Korean shipbuilder Hanwha Ocean and hinted at further retaliation after Washington imposed new trade restrictions, increasing market uncertainty. The IEA expects a record global oil surplus in 2026 of nearly 4 million barrels per day, 18% higher than the previous outlook, as OPEC+ ramps up production and output from rivals continues to grow.

Platinum (XPT/USD) held above $1640 per ounce, nearing a 12-year high, supported by favorable market fundamentals and escalating US-China trade tensions. Platinum is regaining share in luxury jewelry as its price gap with gold narrows. Steady industrial demand persists for catalysts in gasoline cars, in refining, and the chemical industry. Demand for a “safe-haven currency” increased amid plans by the US and China to impose additional port fees on shipping companies starting Tuesday.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 2.58%, China’s FTSE China A50 (CHA50) decreased by 0.72%, Hong Kong’s Hang Seng (HK50) was down 1.73%, while Australia’s ASX 200 (AU200) showed a positive result of 0.19%.

On Wednesday, the offshore yuan rose to 7.12 per dollar, breaking a three-day losing streak, as the People’s Bank of China reaffirmed its commitment to maintaining currency stability. The central bank continued to set the daily yuan reference rate significantly above market expectations, aiming to mitigate the broader economic and geopolitical fallout from escalating US-China trade tensions. On the economic front, the latest inflation data indicated continued weakness, reflected in persistent deflationary pressure.

The Australian dollar strengthened to around $0.650, recovering some of the previous session’s losses, as investors assessed comments from an RBA official who indicated the probability of higher-than-expected inflation. Markets now estimate the probability of a rate cut at the November 4 meeting as roughly equal, and the probability of a December cut at about 60%, down from the previous 70%. Attention now turns to labor market data to be released later this week.

The New Zealand dollar rose to $0.572 but remained near the six-month low reached in the previous session, as investors digested statements from Reserve Bank of New Zealand Chief Economist Paul Conway. Conway noted that the current Official Cash Rate of 2.5% is at the lower end of the central bank’s neutral range but emphasized that the central bank remains open to further policy easing if necessary. He added that policymakers prefer to wait for economic data before making a decision. Additional pressure on the currency came from renewed US-China tensions, which introduced new uncertainty to global markets and dampened risk appetite.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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