UPDATE: The Australian Securities Exchange (ASX) is poised for a significant drop as global markets stabilize following a robust recovery fueled by expectations of rapid interest rate cuts from the Federal Reserve. Futures indicate a decline of 33 points, or 0.4 percent, for the ASX at the market open on November 24, 2023.
After four consecutive days of gains, the MSCI All Country World Index is holding steady, having trimmed its November decline to just 0.4 percent. This marks a remarkable recovery from nearly 4 percent down just over a week ago, showcasing renewed investor confidence.
With US markets closed for Thanksgiving, European and Asian stocks exhibited modest movements. S&P 500 futures remained stable, suggesting a cautious optimism in the wake of predictions that the Federal Reserve may implement a quarter-point interest rate cut as early as next month, now pegged at an 80 percent probability by money markets.
In a sign of returning risk appetite, Bitcoin surged above US$91,000 for the first time in a week. The Australian dollar was trading at US65.31 cents as of 5:24 AM AEDT, reflecting fluctuating global currency dynamics.
According to Daniel Murray, CEO of EFG Asset Management Switzerland, “We’re building up for a classic year-end rally.” He emphasized that the macroeconomic environment is expected to remain robust into 2026, buoyed by positive corporate earnings forecasts and the delayed impact of forthcoming rate cuts.
In commodities, West Texas Intermediate crude rose by 0.4 percent to US$58.91 a barrel, while spot gold dipped slightly by 0.1 percent to US$4,157.69 an ounce. The yield on 10-year Treasuries remained unchanged at 3.99 percent, indicating stable investor sentiment.
Notably, Japanese and South Korean equities outperformed their regional counterparts, driven by gains in technology shares. In Europe, Germany’s DAX index climbed 0.3 percent, spurred by a 16 percent jump in Puma SE shares amid takeover interest.
In the UK, Chancellor of the Exchequer Rachel Reeves announced a larger fiscal buffer in the Autumn budget, which, despite necessitating tax increases, has reassured bond markets. “We think the UK government did what it needed to do to keep UK bond markets on side,” said Bill Diviney, head of macro research at ABN AMRO.
As global markets react to these developments, traders are closely observing the evolving landscape, especially in light of recent comments from Russian President Vladimir Putin, who suggested that US proposals for ending the Ukraine conflict could form the basis for future agreements.
As the trading day unfolds, all eyes will be on how these dynamics will impact the ASX and global equities. Investors are advised to stay tuned for further updates as market conditions continue to develop.
