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Gold rebounds after steep losses
Nvidia’s quarterly results take center stage as markets evaluate its performance in the AI boom, potentially setting the tone for market direction for the rest of the week
USD/JPY: BOJ's Ueda signaled gradual rate hikes but avoided confirming a December move; USD/JPY steady at 154.60 after Kato's warning on yen weakness.
Gold: Prices rebounded after steep losses, driven by geopolitical tensions, with Societe Generale forecasting continued strength due to fiscal and policy factors.
Oil: Prices edged higher as Russia-Ukraine tensions intensified but were capped by weak China demand and a projected global surplus; Brent near $71, WTI near $67.
USD/JPY
Bank of Japan Governor Kazuo Ueda reaffirmed that any increase in interest rates would proceed gradually, contingent on the economy evolving in line with the central bank's expectations. However, he avoided confirming whether a rate hike could occur in December.
In a later press briefing, Ueda acknowledged that acting too late on rate adjustments could lead to the need for more aggressive measures, suggesting the BOJ might move preemptively if conditions warrant. Market predictions for a 0.25% rate increase at the December 19 meeting held steady at 54%.
The yen had strengthened briefly after Japanese Finance Minister Katsunobu Kato warned against excessive yen weakness and hinted at possible intervention if volatility persisted. The USD/JPY pair was steady at 154.60.
Gold
Gold prices rebounded slightly after experiencing their steepest weekly decline since 2021, driven by heightened geopolitical tensions in the region. Societe Generale remains optimistic about gold’s potential to sustain its bullish trajectory following a likely near-term pause.
The bank attributes this outlook to several key drivers: persistent U.S. fiscal imbalances, potential shifts in interest rate policy, the weaponization of the U.S. dollar in sanctions, and escalating global geopolitical risks.
Oil
Oil prices nudged higher on Monday following an escalation in the Russia-Ukraine conflict over the weekend. However, gains were limited by ongoing concerns about weakening fuel demand in China, the world’s second-largest oil consumer, and expectations of a global oil surplus.
Brent crude was last seen near $71 while WTI was near $67.
Market Watch
Nvidia is set to release its highly anticipated quarterly earnings, with investors eager to gauge its performance amid the AI boom.
