Some key factors had driven the intense rebound in the markets last week. First, the colder-than-expected US CPI data bolsters bets that the Fed will slow on rate hikes. Second, China’s reopening hopes are looming as the country further relaxes its quarantine policy on inbound travelers. The third is a potential Republican victory in the House or Senate for the US midterm elections. Notably, the riskiest stock markets, the tech-heavy index, the Nasdaq, and the barometer of Chinese stocks, the Hang Seng Index, rose the most each week in such a relief rally. But of course, the big crypto player, the downfall of FTX, has also raised concerns about the digital token’s regulatory issues, which have compounded the losses for these coins.
In addition to the three mainstream stories above, a wealth of major data will continue to offer clues to the global economic trajectory, which shapes future market trends. America’s latest mega-cap tech company, Nvidia’s earnings will also be in the spotlight. Moreover, the G20 meetings will bring together all the influential leaders of the world to sit down and discuss issues of confrontation between countries, where US President Joe Biden will meet Chinese President Xi in person for the first time as president.Click to enlarge the table
What are we looking at?
- US bond yields fall: US bond yields fell sharply amid light inflation data last week, with the yield on the 10-year note falling to 3.81% from the week’s high of 4.15%, prompting a intense recovery of relief on Wall Street. See bond movements
- The US dollar slides to a 3-month low: The US dollar index saw its biggest two-day drop since 2009 amid the sharp drop in bond yields, which also contributed to the dramatic 5.7% drop in USD/JPY. Despite a broad rally in equity markets, the rapid decline in the US dollar and bond yields could indicate that the inflationary problem may soon become a deflationary threat to the global economy. US dollar trading index
- A jump in metal prices: Along with the weakening US dollar, China’s easing of covid restrictions continued to push commodity prices higher on Friday, generally gold and copper, up 5.7% and 8% , respectively. Gold has reversed a multi-month downtrend since March from a technical standpoint. Check the gold trend
- Chinese markets continue their rebound frenzy: Hong Kong markets continued to rebound from their 13-year lows as the abandonment of the Covid-zero policy may not be avoidable, although the authorities’ determination to fight the expansion of disease. Trading the Hong Kong Markets
- Routing of cryptocurrencies: FTX bankruptcy adds to Cryptocurrencies losses, with Bitcoin remaining below 17,000 over the weekend as the popular crypto exchange faces US SEC investigation into its conduct in client funds, which could cause looping effects on the other parts. See cryptocurrency movements
Economic calendar (November 14 – November 18)Click to enlarge the table
Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not expressing opinions) is provided for informational purposes only and does not take into account your personal circumstances or objectives. Nothing in this document is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically restricted from processing prior to providing such material, we do not seek to take advantage of the material prior to its dissemination.