The Dow Jones (US30) rose 0.65% on Monday. The S&P 500 Index (US500) was up 0.27%. The NASDAQ Technology Index (US100) closed at its opening price. Stocks rose amid lower geopolitical risks in the Middle East after Israel launched only a limited retaliatory strike on some Iranian military installations over the weekend and did not bomb oil infrastructure. Corporate earnings season for the third quarter remains in full swing. Those giants will be reporting this week. Of the companies in the S&P 500 that have already posted earnings, 76% beat estimates. According to Bloomberg Intelligence, S&P 500 companies, on average, are expected to report quarterly earnings growth of 4.3% y/y in Q3, below the consensus of 7.9% y/y growth seen in July.
Boeing (BA) is down 2.71% after it began selling $19 billion worth of shares to reduce debt and try to stave off a downgrade to undesirable. Coinbase (COIN) is up 5.48% thanks to support from Bitcoin’s 4.1% rally on Monday.
Bitcoin (BTC/USD) broke the key $70,000 mark this week for the first time since June, driven by strong inflows into US Bitcoin spot exchange-traded funds. According to industry data, US Bitcoin funds have recorded inflows of more than $3 billion in the past two weeks, bringing year-to-date inflows to more than $25 billion. Betting on Donald Trump’s victory in the US presidential election on November 5 has also contributed to the rise of crypto assets, as he has consistently voiced support for the crypto industry during his campaign.
In October, the Canadian dollar fell to 1.39 per US dollar, the weakest since October 2022, amid pressure from lower oil prices and the Bank of Canada’s (BoC) dovish stance. At its last meeting, the Bank of Canada cut its key interest rate by 50 bps and signaled that more rate cuts are likely to follow, contrasting with the US Federal Reserve’s less accommodative outlook. This was driven by slowing inflation and a softening labor market, with inflation falling to 1.6% in September, below the 2% target for the first time in three years, and unemployment hitting a two-year high of 6.6%
The Mexican peso (USD/MXN) slipped below 20 per dollar in October, hitting a seven-week low, as mid-month inflation data coincided with signals from recent Bank of Mexico meeting minutes hinting at a potentially looser monetary stance. Core inflation fell to 3.87% from 3.95% in the first two weeks of October, fueling speculation of a 0.25% interest rate cut in November, which could put pressure on the peso by curbing capital inflows.
Equity markets in Europe were steadily rising on Monday. Germany’s DAX (DE40) rose by 0.35%, France’s CAC 40 (FR40) closed 0.79% higher, Spain’s IBEX 35 (ES35) gained 0.77%, and the UK’s FTSE 100 (UK100) closed up 0.45%.
As for oil, after the easing of tensions in the Middle East, the market’s attention shifted back to weak fundamentals, particularly sluggish demand growth in China and the expected increase in OPEC production. These factors have a negative impact on oil quotations.
Asian markets were predominantly rising on Monday. Japan’s Nikkei 225 (JP225) rose by 1.82%, China’s FTSE China A50 (CHA50) added 0.07%, Hong Kong’s Hang Seng (HK50) gained 0.05%, and Australia’s ASX 200 (AU200) posted a positive 0.12%.
The offshore yuan fell to 7.15 per dollar, hitting a more than two-month low. It remains under pressure from a strengthening US dollar, supported by signs of resilience in the US economy and growing expectations of a possible victory for Donald Trump in the upcoming presidential election. In addition, traders remained cautious as they awaited further details on anticipated fiscal stimulus measures from China’s top leaders at their upcoming meeting from November 4 to 8.
On Tuesday, the New Zealand dollar held near the three-month low reached in the previous session. Domestically, the kiwi remains under pressure as the Reserve Bank of New Zealand (RBNZ) is expected to continue aggressively cutting interest rates now that inflation has returned to the target range. Investors are currently estimating a 0.5% rate cut at the Central Bank’s last meeting of the year in November, with some expecting a 75 basis point cut.
In Japan, the ruling Liberal Democratic Party lost its parliamentary majority in elections over the weekend, raising policy uncertainty and further complicating the Bank of Japan’s (BoJ) plans for a rate hike. Meanwhile, data showed Japan’s unemployment rate fell to 2.4% in September from 2.5% in August, the lowest in eight months. Investors now await the Bank of Japan’s policy decision on Thursday, where rates are expected to remain unchanged.
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.
