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Stock markets continue to rise in euphoria after yesterday's dovish Fed decision. U.S. index futures gain up to 3.00%, with the US100 up by 4.00%. It's important to note the contract rollover that took place overnight.
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However, even without accounting for the rollover, the SP500 index still gains nearly 2.00%, reaching new all-time highs at 5720 points, while the Nasdaq 100 index is currently testing resistance at 20,000 points, with an impressive gain of 2.90%.
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The dollar index remained relatively unchanged throughout most of the day. However, towards the end of the day, selling pressure prevailed, leading the USDIDX to lose 0.20%, closing at 100.4000 points.
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Citi Bank expects aggressive monetary easing to continue in upcoming meetings and does not rule out another 50 basis point rate cut.
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JPMorgan predicts another 50 basis point rate cut in November, which could be adjusted based on weaker labor market data from upcoming employment reports.
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Goldman Sachs expects a longer series of 25 basis point cuts from November through June 2025, with the decision between a 25 or 50 basis point cut in November depending on further employment reports.
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The market currently prices in a roughly 30% chance of a 50 basis point cut during the November meeting.
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U.S. existing home sales came in at 3.86 million (expected: 3.95 million; previous: 3.96 million). Although the data is weak, future rate cuts are expected to positively stimulate the market.
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Initial jobless claims in the U.S. last week were just 219,000, down from the previous reading of 230,000. Low claims underscore the Fed's rhetoric about a strong economy, reinforcing investor confidence in buying riskier assets.
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Fitch Ratings notes that while Federal Reserve rate cuts alleviate some pressure on the U.S. housing market, mortgage rates are unlikely to fall below 5.0% before 2027.
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Gas inventories rose slightly above expectations (+58 bcf; expected: 54 bcf; previous: 40 bcf), although the growth rate is below the 5-year average. There is a strong possibility that inventories will fall below the 5-year average before the heating season begins.
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As expected, the Bank of England kept interest rates unchanged. The vote to maintain rates at 5% was 8-1, with only Swati Dhingra voting for a 25 basis point cut.
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Gold hits new all-time highs, gaining 1.20% today. Prices are currently consolidating just below $2600 per ounce.
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Bitcoin gains 5.50% to $63,600, extending yesterday's dynamic growth. Positive sentiment is returning to the cryptocurrency market, supported by hopes for a soft landing of the U.S. economy and interest rate cuts.
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