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Corporate results and US PCE inflation the week’s focus
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Brent, gold prices fall
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By Chris Prentice and Alun John
NEW YORK/LONDON, – Investors scaled back safe-haven bets on Monday as worries over a wider Middle East conflict eased, boosting world equities and pressuring gold, oil, and bond prices.
Equities Gain as Geopolitical Concerns Ease
MSCI’s gauge of stocks across the globe rose 2.62 points, or 0.35%, to 745.90 by 11:04 a.m. EST. The shift in investor sentiment towards riskier assets comes as tensions in the Middle East showed signs of calming.
In a reversal of Friday’s “risk off” mood, spot gold lost 2.1% to $2,340.25 an ounce, poised for its biggest one-day drop in over a year. This decline in gold prices reflects a reduced need for safe-haven assets amid the easing geopolitical tensions.
On Wall Street, major indices saw modest gains, indicating a positive outlook as fears of a wider conflict waned.
Market Volatility and Investor Sentiment
Investors have recently expressed caution ahead of weekends due to concerns over escalating tensions in the Middle East during market closures. The calming of these fears on Monday brought relief to market participants.
Despite the relaxation of immediate geopolitical risks, the market remains attentive to potential interest rate adjustments by the Federal Reserve and the performance of the chip sector, indicating ongoing volatility in the trading environment.
Impact of Earnings Reports and Economic Data
The upcoming week will see a significant number of corporate earnings reports, particularly in the tech and banking sectors. These earnings releases, along with economic data such as the US PCE inflation, are likely to influence market movements in the coming days.
It is crucial for companies to meet or exceed earnings expectations for equities to sustain their positive momentum.
“As long as there is this uncertainty about the cutting cycle particularly in the U.S, it’s interesting for investors to be in dollar longs because of its dual status as a high-yielding currency and also a defensive currency,” said Yvan Berthoux, FX strategist at UBS.
Crude oil fell as traders put the focus back on fundamentals with a rise in U.S. stockpiles as the backdrop.
Brent futures 0.57% to $86.79 per barrel as U.S. crude lost 0.26% to $82.92.
This article was generated from an automated news agency feed without modifications to text.
Insight:
The easing of fears regarding a wider Middle East conflict has led to a shift in investor sentiment towards riskier assets like equities while reducing the demand for safe-haven assets such as gold. Despite the temporary relief, ongoing geopolitical uncertainties and economic factors, such as earnings reports and interest rate expectations, continue to contribute to market volatility. Attention to these dynamics will be crucial for guiding investment decisions in the near term.
