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Oil and gold surge amid Middle East tensions
Investors are awaiting key U.S. economic data and Fed Chair Powell’s remarks, which could influence global market sentiment.
Japan observe a market holiday
Reserve Bank of Australia is expected to keep rates steady
People's Bank of China cut its 14-day reverse repo rate to 1.85%.
On Monday, Australian and New Zealand markets faced mixed fortunes, driven by Australia's economic data showing signs of weakness, as the Services PMI dropped to 50.6, and Manufacturing PMI declined to 46.7. Despite these challenges, the Reserve Bank of Australia is expected to keep interest rates unchanged at 4.35%, though it may maintain a hawkish stance due to persistent inflation and a robust labor market.
In New Zealand, trade data revealed a growing deficit, with exports falling to 4.97 billion from a previous 6.09 billion, and imports slightly increasing to 7.17 billion. The country’s monthly trade balance worsened to -2.2 billion from -963 million.
Meanwhile, Japan observed a market holiday, but diplomatic tensions between Japan and China are escalating. Japanese Foreign Minister Yoko Kamikawa is scheduled to meet her Chinese counterpart, Wang Yi, in New York to address recent attacks on Japanese nationals in China.
In China, markets were buoyed by the People's Bank of China's decision to cut its 14-day reverse repo rate to 1.85%.
Commodities
Commodities saw notable shifts as oil prices edged higher. Brent crude futures climbed above $74 per barrel, while U.S. crude rose above $71.5. The increase was supported by heightened tensions in the Middle East and the anticipation of stronger demand following the Federal Reserve's recent rate cut. Additionally, reports of potential supply disruptions, including the possibility of Shell shutting down production at two facilities in the Gulf of Mexico, further boosted oil prices.
Gold hit a new record high today, with spot gold trading reaching above $2,631 per ounce. Geopolitical tensions in the Middle East also contributed to a stronger safe-haven appeal for gold. However, a stronger-than-expected U.S. PMI reading later in the week could lift the dollar, potentially putting downward pressure on the gold price.
Looking ahead, key Fed speeches and U.S. economic data on the horizon. Investors will be closely watching remarks from Fed Chair Jerome Powell, as well as upcoming U.S. PMI data, which could impact global market sentiment.
