Last week, the international market was volatile, with the US Consumer Price Index (CPI) slightly recovering in October and expectations of a Federal Reserve interest rate cut falling slightly.
In terms of the market, the US stock market fell across the board, with the Dow Jones Industrial Average falling 1.16%, the Nasdaq falling 3.43%, and the S&P 500 index falling 1.99%. The three major European stock indexes performed poorly, with the FTSE 100 index in the UK falling 3.00%, the DAX 30 index in Germany falling 1.14%, and the CAC40 index in France falling 2.97%.
There are many highlights this week, with the November Purchasing Managers' Index (PMI) performance of major European and American economies receiving market attention, which may affect the prospects of further interest rate cuts by the Federal Reserve and the European Central Bank, as well as the latest CPI data from Canada and Japan. The 'Trump deal' is still in a high fever period, and changes in the foreign exchange market are affecting market nerves; The earnings season is coming to an end, and Nvidia, a leading artificial intelligence company, will present its financial report.
The G20 Leaders' Summit was held in Rio de Janeiro, Brazil, with the theme of "Building a Just World and a Sustainable Planet". It will discuss issues such as global inequality, sustainable development, and global governance reform.
The risk of inflation in the United States is receiving renewed attention
The so-called 'Trump deal' of the past week has shown no clear signs of cooling down, as more congressional election results emerge and the Republican Party ultimately controls both houses of the US Congress, which is believed to make it easier for Trump to fulfill his election promises.
The latest US CPI data has shown some stickiness in price pressure, and Federal Reserve Chairman Powell stated at the event that there is no need to rush to cut interest rates. The pricing of federal funds rate futures shows that the market expects the Federal Reserve to remain inactive at least once in the next two meetings.
In terms of data, the preliminary November PMI data for the manufacturing and service industries from S&P have been released this week, which can provide clues to whether the US economy is really moving towards a soft landing. Price breakdowns will be of particular interest to the market as the outside world needs to confirm whether the inflation stickiness in October is sustainable and diffusive.
Multiple real estate indicators will also be released one after another, including November's confidence data for home builders, October's monthly rates for housing starts, building permits, and completed home sales. In addition, the number of initial jobless claims per week, the University of Michigan Consumer Survey in November, and inflation expectations will also be of concern.
As the financial reporting season draws to a close, Nvidia will become the biggest focus. The retail business performance of Wal Mart, Ross Department Store, Lloyd's and others will also be released. The financial reports of China Concept stocks Weilai Auto, Xiaopeng Auto, Ctrip and Baidu will also be released in succession.
Crude oil and gold
The weakening of international oil prices, the strengthening of the US dollar, and concerns about demand continue to plague the crude oil market. WTI crude oil fell 4.77% to $67.02 per barrel in the near month contract week, while Brent crude oil fell 3.83% to $71.04 per barrel in the near month contract week.
Last week, OPEC's monthly market report once again lowered its global energy demand forecast for 2025, while the International Energy Agency (IEA) predicts that global crude oil supply will exceed demand by over 1 million barrels per day next year.
Strategic Energy&Economic Research Company; Economic Research President Michael Lynch stated that as the US economy appears to be heading towards a soft landing, oil prices are under pressure. He said that even if OPEC+major oil producing countries continue to extend their production cuts, Saudi Arabia seems increasingly dissatisfied with those countries that exceed their quotas, mainly Iraq and the United Arab Emirates, which increases the possibility of a price war. Meanwhile, investors have been weighing the potential impact of US President elect Trump's policies, including efforts to increase domestic oil production and strengthen sanctions against Iran. If he strengthens the implementation of sanctions against Iran, it could cause the market to lose one million barrels of oil per day, thereby supporting current price levels. But if he adjusts sanctions against Russia, this will largely offset the reduction in Iran's supply, "Lynch said.
At the same time, international gold prices have fallen sharply, and changes in expectations of the Federal Reserve's interest rate cuts have dampened market sentiment. The COMEX gold futures contract for November delivery on the New York Mercantile Exchange fell 4.53% to $2565.70 per ounce, marking the largest weekly decline in nearly three years.
The US dollar index recorded its largest weekly increase since September, further raising the cost of holding gold. At the same time, US treasury bond bond yields continued to rise. Alex Ebkarian, Chief Operating Officer of precious metal trader Allegiance gold, said, "All uncertainty, especially short-term uncertainty, has been eliminated from the portfolio. Now gold has just returned to fundamentals
At the same time, Carlo Alberto De Casa, market analyst of Internet securities firm Kinesis Money, said: "Up to now, gold has been negatively affected by Trump's election, but this situation may change if more uncertainties emerge in the medium term."
Europe's recovery may face challenges
The better than expected gross domestic product (GDP) data for the Eurozone in the third quarter and the rebound in CPI inflation in October have reduced the possibility of the European Central Bank continuing to cut interest rates by 50 basis points at its next meeting. However, high-frequency data shows that economic activity in the eurozone is still at a stagnant level, and the outlook for leading Germany is bleak. The recent split in the ruling coalition has increased uncertainty.
The upcoming November PMI preliminary values for the Eurozone, Germany, and France are receiving significant attention. Gilles Moec, Chief Economist of AXA Group, stated in a report that "the path for the two major EU economies to finalize their budget bills is still unclear." HSBC analysts said that due to increased uncertainty after the US election, business activity in the eurozone in November may continue to slow down.
Other data that needs attention include the Eurozone trade account for September and the final CPI data for October, and the European Central Bank will release a financial stability assessment report.
The latest inflation data for the UK will be released on the 20th, and the overall CPI for September has dropped to 1.7%. The Bank of England previously announced a 25 basis point reduction in interest rates, but stated that it would be cautious about further easing as high core inflation pressures became a disruptive factor. The bank raised its inflation forecast for 2025 from 2.2% to 2.7%. The pricing of interest rate futures shows that there is only an 18% chance of another interest rate cut in December, and it is expected to be reduced by 25 basis points in March 2025.
In addition to prices, the retail sales data for October in the UK will be released on the 22nd. In a report, Tian Da Investment Consulting stated, "We expect the overall inflation rate to once again exceed the 2% target, with the rise in energy price ceilings being the main driving force. Retail sales data is worth paying attention to, as it will for the first time suggest whether the strong momentum of retail spending in the third quarter will continue into the fourth quarter
This week's highlights