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Global markets navigated a mix of geopolitical risks and economic policy changes on Monday, with key indices showing varied performances.
China’s CSI 300 Index fluctuated between gains and losses, the Hang Seng Index in Hong Kong dropped by 0.6%, and futures for the S&P 500 edged higher after six consecutive weekly gains.
Meanwhile, gold reached an all-time high of $2,730 per ounce, reflecting heightened demand as investors sought safe-haven assets.
China lowers lending rates to spur economic growth
China’s central bank implemented cuts to its lending benchmarks in a bid to revive growth and stabilize the housing sector.
The one-year loan prime rate was reduced to 3.10% from 3.35%, while the five-year rate, which impacts mortgages, was lowered to 3.60% from 3.85%.
The rate adjustments align with the Politburo’s directive for aggressive monetary easing.
“The PBOC’s decision reinforces its focus on economic support,” said Beckly Liu, head of China macro strategy at Standard Chartered Plc.
“It also signals a commitment to addressing challenges in the property market.”
The offshore yuan remained steady at 7.11 per dollar, reflecting cautious optimism about the impact of these measures.
Gold surges amid Middle East tensions and US election uncertainty
Gold prices soared to a record high of $2,730 an ounce, driven by escalating geopolitical tensions.
Investors responded to reports of a drone explosion near the residence of Israeli Prime Minister Benjamin Netanyahu, stoking fears of conflict between Israel and Iran.
With the US presidential election drawing near, markets are positioning for a potentially volatile outcome. Financial analysts warn that shifts in policy under a new administration could impact global markets.
“The uncertainty surrounding the election makes gold an attractive hedge against geopolitical and economic risks,” said Bruce Pang, chief economist at Jones Lang LaSalle Inc.
Tesla and Boeing earnings add to market dynamics
US earnings reports are adding to market volatility, with Tesla and Boeing scheduled to announce their quarterly results on October 23.
Tesla’s recent Cybercab unveiling has sparked questions about production goals, while Boeing faces challenges from labor disputes and production delays.
Boeing workers are set to vote on a new contract on October 23, which includes a 35% wage increase over four years.
Investors are closely watching the outcome, as it may impact the company’s production schedule and financial health.
Global meetings and economic data in focus
This week also features key international meetings, including the IMF and World Bank annual gatherings in Washington.
Discussions will cover inflation, geopolitical tensions, and economic policies amid ongoing conflicts in Ukraine and the Middle East.
Meanwhile, Russia will host a BRICS summit, with leaders from Brazil, India, and China attending alongside Russian President Vladimir Putin.
Market participants will also keep an eye on economic data releases from the Eurozone, the UK, and the US.
Cryptocurrency holds firm as Bitcoin nears $70,000
Bitcoin remained steady near $68,784, approaching the $70,000 mark last reached in June.
The rise in demand for cryptocurrencies coincides with growing interest in US exchange-traded funds (ETFs) linked to digital assets. Ethereum also gained 0.8%, reaching $2,733.
Market outlook amid geopolitical and economic uncertainty
The mix of geopolitical risks, economic policy shifts, and corporate earnings reports presents a challenging landscape for investors.
China’s efforts to cut lending rates will be a key test of its ability to stimulate growth, while energy markets are likely to stay volatile.
Crude oil prices rose 0.4% to $69.50 per barrel, highlighting concerns about inflationary pressures.
“Political developments and market volatility will remain primary drivers in the lead-up to the US election,” said Barclays strategist Themistoklis Fiotakis.
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