US policy shifts weigh on China, Dollar strengthens

Asian Markets

Asian markets are experiencing widespread declines today. Key concerns over China's economic recovery, which still awaits a clear boost from stimulus measures, and fears regarding high tariffs on Chinese trade are weighing on the region.

Australia
In Australia, consumer confidence for November has risen, driven by expectations that the Reserve Bank of Australia’s recent interest rate cuts will benefit the economy. Business confidence also saw an increase, according to the National Australia Bank's October business survey. However, business conditions remained unchanged.

Commodities

Crude oil prices are continuing their downward slide, dropping more than 1% on Monday. This follows Friday’s losses and leaves oil just a step away from a seven-day low. Traders are focused on concerns about Chinese demand, as well as OPEC’s lack of agreement on production cuts, which has led to an oversupply situation. Many are awaiting the publication of the monthly OPEC report on Tuesday, though some see it as a non-event after OPEC extended its production cuts by another month last week.

Gold continues to fall, currently trading in the $2,610 range, over $60 lower than last week’s close. The stronger US Dollar is primarily responsible for the drop.

Currencies

The EURGBP pair is ticking higher after the release of the October CPI data from Germany and labor market figures from the UK. A surprise increase in the UK unemployment rate is leading to expectations of faster rate cuts by the Bank of England, which is weakening the British pound against the euro.

US Dollar
The US Dollar remains strong, supported by expectations surrounding President-elect Trump’s economic policies. This has led to increased foreign capital inflows and a more robust greenback. As the dollar strengthens, it negatively impacts commodities like gold and silver, which are priced in USD. The Federal Reserve’s approach to interest rate cuts is also a key factor, with slower rate reductions seen as positive for the dollar.

Today's Key Events

• 10:00 am GMT - Germany’s ZEW sentiment data for November (Forecast: 12.8, Previous: 13.1)
• 3:00 pm GMT to 0:30 pm GMT- Federal Reserve’s speeches