FX Careers

General Market Analysis | 9 November 2023

Markets Steady as Investors Assess Latest Updates

It was a relatively quiet day in financial markets yesterday as investors took the opportunity to have a bit of a breather and assess the plethora of fresh data and central bank updates we have had over the last couple of weeks. The major US indices all finished the day close to flat, the Dow lost 0.12%, the S&P gained 0.10% and the Nasdaq added just 0.08%. Bond markets also experienced a mixed day with the US 10-year yield dropping down to 4.5% again and the 2-year gaining 1.6 basis points to trade up to 4.94%. Currency markets were quiet with the dollar managing to hold onto gains made in the last few sessions, but the bigger moves came in commodities with Oil sliding lower again and Gold taking another step down to trade back under $1,950 again.

Gold’s Lustre is Slipping

Gold prices experienced their third straight session of declines yesterday as the market started to reduce its war risk premium and the dollar continued to gain ground in light of ‘higher for longer’ interest rates in the US. It has now topped out on 3 separate occasions just north of the $2,000 level as safe-haven buying on the back of the conflict in the Middle East and dollar selling on the back of a more dovish Fed combined to see prices increase over 10% in October. However, circumstances have changed, and Gold has dropped 3% in the last week’s trading. We have heard from several Fed members this week and their balanced view has led investors to assess the impact of rates remaining elevated and the conflict in the Middle East hasn’t escalated as much as some feared. Traders remain cautious, however, as both sides of this equation could change rapidly. They are expecting more volatility not less, over the coming days and weeks.

Busy Trading Day Ahead for Investors

It has been a relatively quiet last few trading sessions for investors but there are a couple of key risk events on the calendar today that could see volatility pick up again. In the Asian session, there are key data due out of China in the form of the latest CPI and PPI data and investors will be hoping for signs of a pickup in the world’s second-biggest economy. There is little on the calendar in the European session but later in the day once the US wakes, we have the usual weekly unemployment claims numbers, followed by a plethora of central bank speakers, culminating in ECB President Christine Lagarde and Fed Chair Jerome Powell.