Fed Chair Powell tries to curb financial market euphoria, but general belief is that rate cut is just a matter of months – Gold surpassed all-time record of $2,211 an ounce overnight
Jerome Powell on Friday attempted to slow the momentum in financial markets, now convinced that a rate cut is a matter of months away. The Federal Reserve’s measure has, for now, contained the rise in stock prices, pending positive data on employment at the end of the week.
The collection of profits on bonds, at the end of a stellar week, did not stop the bitcoin trend, which jumped above 40 thousand dollars, and above all the gold rush that overnight surpassed the historical record at 2,211 dollars per ounce.
The driving force behind the rise of the yellow metal, favored by the fall in rates, is above all the attitude of the central banks who, since August, have bought 800 tons of gold: lower interest rates reduce the opportunity cost of holding zero yield gold.
China, Rescue Tests for the Real Estate Sector
The advance of gold coincided with the boom in the Indian Stock Exchange, the country most sensitive to the attractiveness of the yellow metal. to push up Bombay +1.2%, a new absolute record, was the success of the ruling BJP party that dominated the elections held yesterday in four important states of India.
Vietnam is also advancing: on Wednesday Sam Altman, once again at the head of Open Ai, will participate in the investment day of Vimfast, the Hanoi automotive group that is growing rapidly in the United States.
The European stock markets, supported by the positive finish on Wall Street, open higher. EuroStoxx50 futures mark +0.2%.
Milan’s Ftse Mib index on Friday rose 0.6%. During the week the increase was 1.1% to 29,928 points, the new maximum in 15 years.
Today Lagarde Speaks for the Last Time Before the ECB
The president of the ECB is in Paris today Cristina Lagarde will speak for the last time before the monetary meeting on December 14. Any decision to be announced next week will be influenced by industrial production data due on Thursday, which will provide information on growth in the fourth quarter, and on Tuesday by the consumer survey on inflation expectations.
Fantastic week for government bonds, dragged down by the growing belief that the darkest period of inflation is behind us. The 10-year US Treasury rose +2%, with the yield falling to 4.19%, the lowest since August. It was the best week since March. Two-year Treasury at 4.53%, the lowest level since June. 10-year German Bund +2.2%, with the yield falling to 2.36%, the lowest since July. Ten-year BTP +2.2%, with the yield falling to 4.09%, the lowest since August.
Fitch Upgrades Greece to BBB Stable
Fitch raised Greece’s credit rating to BBB- with a stable outlook. Greece has returned to “investment grade”, that is, to the category of the most reliable investments. Fitch expects that Greece’s debt will fall to 160.8% of GDP this year, rising to 141.2% in 2027.
Athens “remains strongly committed to fiscal consolidation, and the primary surplus is expected to rise to 1.1 % of GDP in 2023,” says Fitch, and a +2.4% growth is expected in 2023.
By Audy Castaneda
