A quiet start amid holidays and geopolitical tensions

With Columbus Day in the U.S. and thanksgiving in Canada, north American markets see subdued activity

By Farah Mourad | 14 October 2024

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  • Key events: Swiss PPI, Fed's Kashkari & Waller

  • China’s soft CPI and unclear stimulus measures signal economic challenges

  • Gold trades near $2,660 and silver at $31.30, supported by safe-haven demand

The economic calendar offers limited macro data to move the needle on volatility today. However, investor attention may turn to a few key speeches by Federal Reserve officials, which could provide hints on future monetary policy.

Key Macro Events:

  • Switzerland: September PPI inflation (Prior: -0.2% y/y)
  • USA: Fed's Kashkari speech
  • USA: Fed's Waller speech

China

Over the weekend, Chinese authorities provided limited clarity on new stimulus efforts, leaving some investors disappointed. However, the financial regulator announced plans to lower financing costs for small and medium-sized enterprises, signaling some economic support.

Meanwhile, China's latest inflation data points to persistent challenges. The Consumer Price Index (CPI) for September grew by only 0.4% y/y, missing the forecast of 0.8% y/y and below the previous reading of 0.6% y/y.

Commodities

  • Gold has attracted dip-buying and is trading near a one-week high around the $2,660 mark in the early European session. The recent US PPI data hinted at favorable inflation conditions, raising expectations for future Federal Reserve rate cuts. In addition, geopolitical risks in the Middle East continue to fuel demand for the safe-haven asset.

However, strong US Treasury yields and a firm US dollar, hovering near its mid-August peak, are limiting further gains for gold. Investor caution also stems from China's pledge to increase debt issuance, adding uncertainty to the bullish outlook on bullion.

  • Silver continues its upward momentum, extending its rally to a third consecutive day. The metal is trading near $31.30 per troy ounce during the Asian session, supported by heightened safe-haven flows amid escalating geopolitical risks.

EUR/USD


The euro has lost ground, sliding toward 1.0920 in the early Asian session. The currency is facing pressure from risk aversion tied to geopolitical tensions in the Middle East and rising concerns over China-Taiwan relations. Elevated caution in global markets weighs on the euro, with investors seeking refuge in safer assets.

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