Markets higher after lower CPI data in some DM’s

  • Market Overview

Most markets closed higher on the last day of November after lower inflation numbers in some developing markets (DM) continued to increase bets that central banks could start to cut interest rates next year. A bigger-than-expected fall in Eurozone inflation boosted markets on the continent yesterday. “Preliminary figures showed both headline and core inflation rate fell more than anticipated to 2.40% and 3.60% respectively. The headline rate is approaching the ECB target of 2%. Investors bet the first ECB rate cut could happen as early as April, even though central bank policymakers have been reiterating that borrowing costs need to stay elevated for some time,” Trading Economics reported.

Improved risk on sentiment boosted the local bourse which closed 0.39% in the green. However, the rand weakened slightly against major currencies after data showed that “South Africa posted a trade deficit of R12.7 billion in October 2023, contrary to market estimates of a surplus of R9.1 billion and following a downwardly revised R12 billion surplus in September.”

The same catalysts caused Asian markets to close higher, with Hong Kong’s Hang Seng rising by 0.29% and Japan’s Nikkei closing up by 0.50%.

US markets, however, were mixed at 18h45, with the Dow up, but the S&P and Nasdaq in the red. After data showed that “both annual headline and core PCE inflation slowed in line with expectations, but the headline index was flat compared to September, below forecasts of a 0.10% rise,” Trading Economics added.

Gold traded lower at $2 037.30 an ounce at 18h45, while Brent crude traded hands at $82.76 a barrel.

PSG Wealth Daily Investment Update, 01 December 2023

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