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Charot FXMart · Guru

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Charot FXMart · Guru

India: economic growth is possible up to 8%

The head of the Reserve Bank of India, Shaktikanta Das, expressed confidence in the country's ability to achieve sustainable economic growth in the region of 7.5-8% in the medium term.

This statement was made against the background of published data on the slowdown in India's GDP growth to 6.7% in the second quarter of this year, compared with 8.2% in the same period last year. This dynamic has increased the pressure on the RBI to lower interest rates.

Das stressed that steady growth of 7.5-8% is realistic for the largest country in the world. Although the International Monetary Fund previously called India the «fastest growing major economy in the world,» growth has slowed in recent quarters and the IMF forecasts a decline to 6.5% in 2025.

The head of the RBI also noted that the influence of external factors, such as the actions of the Fed, is taken into account, but internal factors remain decisive. The question of a possible reduction in the RBI rate in October remained open. Das stated that the decision will depend on the monthly dynamics of inflation and growth.

Charot FXMart · Guru

Oil growth is held back by concerns about weakening demand

Yesterday, Brent oil prices rose to $73.30 per barrel, supported by expectations of lower interest rates and supply disruptions caused by Hurricane Francine.

However, this growth was held back today by concerns about declining demand, especially in China, amid weak economic data released over the weekend. The current Brent quote is $72.50 per barrel. North American WTI crude is trading near $68.96.

Supply disruptions due to Hurricane Francine

After Hurricane Francine, oil production in the Gulf of Mexico decreased by 12%, and natural gas production by 16%. These disruptions may contribute to further price increases, although oil companies have been actively restoring production in recent days as the hurricane weakens.

Awaiting the Fed's decision

Investors are waiting for the meeting of the US Federal Reserve System, which will be held on Wednesday. The central bank may lower rates, which will support oil prices. Expectations of a more significant rate cut of 50 basis points put pressure on the dollar and stimulate the growth of oil prices.

Concerns about demand

However, the increase in oil prices is limited by concerns about slowing economic growth in China. The recent weak economic performance of China, the world's largest oil importer, has increased concerns about demand for black gold. An additional negative was brought by the forecasts of OPEC and the IEA, which lowered expectations of oil demand for the coming years.

Charot FXMart · Guru

Inflation in the eurozone has slowed to 2.2%

Inflation in the eurozone slowed to 2.2% in annual terms in August, according to the final report of Eurostat. This decrease compared to July's 2.6% inflation coincided with the preliminary estimate and forecasts of analysts. On a monthly basis, prices in the region increased by 0.1%.

The CPI Core index (core inflation), which does not take into account volatile prices for energy, food and alcohol, showed an increase of 2.8% year-on-year.

Prices for food, alcohol and tobacco products increased by 2.3%, similar to the July figure. Energy prices, on the contrary, decreased by 3% after rising by 1.2% in July. Services have risen in price by 4.1%. In the 27 EU countries, the annual price increase was 2.4% after 2.8% in July.

The lowest inflation was recorded in Lithuania (0.8%), Latvia (0.9%), Ireland, Slovenia and Finland (1.1%). The highest growth in consumer prices was recorded in Romania (5.3%), Belgium (4.3%) and Poland (4.0%).

In Germany, annual inflation fell to 2.0% from 2.6% in July, in France — to 2.2% from 2.7% a month earlier, in Italy — to 1.2% from 1.6% in July, in Spain — to 2.4% after 2.9% a month earlier.

Charot FXMart · Guru

Kiyosaki: Bitcoin, gold and silver will soar in price

Robert Kiyosaki, author of the book «Rich Dad, Poor Dad», predicts significant growth of bitcoin against the background of easing monetary policy of the US Federal Reserve System.

In his opinion, lower interest rates will force investors to move away from "fake assets" such as bonds and invest in real assets such as bitcoin, gold and silver.

In his post on the social network «X», Kiyosaki stressed that those who argue about the advantages of gold or bitcoin will lose when the Fed continues to cut rates and prices for real assets begin to rise. The author criticized the debate about which is better, gold or bitcoin, comparing them to people «arguing about a Ferrari or Lamborghini while on the bus.»

After the Fed's rate cut on Wednesday evening, bitcoin continued its recent rise. On Thursday morning, the main digital coin rose to 3-week highs at $62,645. Subsequently, the quotes partially rolled back – the current BTC/USD quote is $62,093.

Charot FXMart · Guru

The consumer confidence index in the UK in September fell to the lowest in 6 months

The UK consumer confidence index in September 2024 fell to the lowest value in the last six months, amounting to -20 points, which is significantly lower than in July and June, when it was at the level of -13 points.

For comparison, in September 2023, the index was at -27 points (previously reported at -21 points). All five components of the indicator showed a decrease compared to July.

The subindex, reflecting consumers' assessment of their financial situation over the past year, fell to -9 points (in August it was -7), which is better than a year earlier, when it was -18 points. Personal finance expectations for the next 12 months also worsened, falling to -3 points from +6 in the previous month. A year earlier, this indicator was at the level of -6 points.

Consumers' assessment of the overall economic situation over the past year has dropped to -37 points compared to -35 a month earlier. The forecast for the next 12 months deteriorated even more: to -27 points from -15 in August.

The willingness of the British to spend money on large purchases also decreased, the subindex fell to -23 points from -13 points in August. In September last year, this indicator was at the level of -28 points.

The average index of consumer confidence for the period from 1981 to 2024 is -10.9 points. The record value of 10 points was recorded in June 1987, while at least (-49 points) was recorded in September 2022.

Charot FXMart · Guru

Gold updated the record in anticipation of fresh signals from the Fed

Gold prices have reached a new historical high in Asian markets due to the optimistic sentiment caused by lower interest rates in the United States. Additional support for the market was provided by the expectations of speeches by representatives of the Federal Reserve System, which may shed light on the further steps of the regulator.

After the Fed lowered the rate by 50 basis points, gold has updated its records and continues to hold its positions confidently. The spot price of gold rose 0.3% to reach $2,631.19 per ounce, while futures rose 0.4% to $2,655.80 per ounce. The weakening of the dollar and the decline in Treasury bond yields also contributed to the strengthening of the metals market.

Experts expect further easing of the Fed's monetary policy, which may lead to a reduction in rates by an additional 125 basis points during the year. A number of key Fed officials, including Chairman Jerome Powell, are scheduled to speak in the coming days, which may provide additional signals for the markets.

Another important event will be the publication on Friday of a report on the PCE index, the main indicator of inflation for the Fed, which may affect further decisions by the regulator on rates. In addition, investors' attention is focused on the meetings of the central banks of Switzerland and Sweden, where interest rates are also expected to decrease.

Other precious metals, however, are showing a decline. Platinum futures fell 0.6% to $974.10 per ounce, while silver contracts fell 0.2% to $31.43 per ounce.

Charot FXMart · Guru

The Central Bank of China reduces a number of rates as part of a large-scale economic stimulus program

The People's Bank of China has announced a package of measures to stimulate the economy. The head of the regulator, Pan Gongsheng, announced a reduction in the reserve requirement ratio (RRR) for large banks by 0.5 percentage points to 9.5%, which will release about 1 trillion yuan ($142 billion) of liquidity. There will be no changes for small and rural banks. It is expected that during the year the RRR may be reduced by another 0.25-0.5 percentage points.

The NBK also lowered the rate on seven-day reverse repo transactions from 1.7% to 1.5%, which will reduce the cost of borrowing under the medium-term lending program (MLF). For the first time in 10 years, the bank simultaneously lowered the RRR and the interest rate.

In addition, it is planned to reduce the base interest rate (LPR) by 0.2-0.25 percentage points, which will affect the cost of corporate, consumer and mortgage loans. Interest rates on mortgages already issued will be reduced by 50 bps, affecting borrowings worth about $5.3 trillion. The initial payment for the purchase of a second home has been reduced to a record low of 15%.

The NBK also plans to refinance mortgage loans and has increased guarantees on bank loans for unsold housing to 100%. Beijing is considering the creation of a stabilization fund for the stock market with support in the amount of at least 800 billion yuan. As part of the program, it is planned to exchange illiquid assets for government bonds and provide a 300 billion yuan re-loan for share repurchase.

Charot FXMart · Guru

Oil may rise in price due to a drop in production in the United States

Analysts believe that after the recent decline in crude oil prices, the situation may soon change due to the expected slowdown in oil production in the United States.

For most of 2024, oil showed positive dynamics, but in recent months the yield has turned negative: the cost of Brent decreased by 3.5%, and WTI – by 0.4% year-on-year.

According to experts, fluctuations in oil prices are caused by both demand and supply factors. The global economy is slowing down, which is holding back demand, and market participants are concerned about a possible increase in oil production by the largest producers — OPEC+ and the United States. However, a number of experts believe that these expectations have already been taken into account in current prices, and in fact the situation may turn out to be different.

«Although oil demand was low in 2024, its decline is not accelerating, which is important against the background of rising global liquidity and lower interest rates,» Wells Fargo Bank said.

In addition, the bank assumes that with prices in the range of $60-70 per barrel, OPEC+ and the United States will reduce rather than increase production, which will help strengthen the market.

Special attention is paid to the statements of OPEC+ on the postponement of the increase in production scheduled for October 2024, as well as the fact that production growth in the United States may also slow down, as the cost of opening new wells reaches $ 64 per barrel. As a result, oil prices are projected to start rising again in the coming months.

Charot FXMart · Guru

The market is waiting for the ECB to cut rates after inflation in France and Spain fell below 2%

The probability of a reduction in key interest rates by the European Central Bank in October increased significantly after the publication of data on slowing inflation in France and Spain.

According to traders, the chances of a 25 basis point rate cut at the ECB meeting on October 17 have increased to 80%. Analysts at major banks such as BNP Paribas and HSBC share similar expectations.

Consumer prices in France, harmonized according to EU standards, increased by 1.5% y/y in September, which is significantly lower than the August figure of 2.2%. A similar trend is observed in Spain, where inflation slowed to 1.7% – this is the lowest growth rate since June 2023, while in August the price increase was 2.4%.

Both of these indicators have reinforced expectations that inflationary pressures are easing, which may lead to a change in the ECB's monetary policy. Currently, the ECB deposit rate is 3.5%, the rate of basic refinancing operations is 3.65%, and the rate on margin loans is 3.9%.

Charot FXMart · Guru

The Fed will cut the rate by another 50 bps in 2024 while maintaining the stability of the economy

The US economy remains strong, and the Federal Reserve System (Fed) intends to maintain it in this state, Federal Reserve Chairman Jerome Powell said at the annual meeting of the National Association for Business Economics (NABE).

Powell also noted that the Fed is trying to reduce inflation, while preventing a significant increase in unemployment.

The Fed's recent decision to lower the interest rate by 50 basis points (bp) reflects confidence that the adjustment of monetary policy will maintain the stability of the labor market with moderate economic growth and a reduction in inflation to the target 2%. This is what is called a «soft landing» of the economy.

According to the median forecasts of the Fed's management, the base rate will be reduced by another 50 bps by the end of 2024, from the current level of 4.75-5% per annum.

«If the economic situation develops according to our forecasts, we will cut the rate twice by 50 bps,» Powell said, stressing that further decisions will depend on incoming economic data. The main goal is to bring the rate to a neutral level, which, according to the Fed's estimates, is about 3%.

Charot FXMart · Guru

The dollar is strengthening, the euro is falling: all attention is on the US labor market

The DXY dollar index soared to a 3-week high of 102.05, bringing the EUR/USD pair to strong support at 1.10. The dollar's recovery is driven by strong data on the US economy and labor market, as well as expectations of a slowdown in the Fed's rate cuts.

On Thursday, the dollar index reached a six-week high, supported by indicators of the service sector and a positive picture on the labor market. The probability of a Fed rate cut by 50 bps in November fell to 32%, which led to a 1.5% strengthening of the dollar over the week.

At the same time, the euro is losing 1.2% amid the likelihood of an ECB rate cut this month to 90%. The slowdown in inflation and the deterioration of the economic situation in the eurozone may force the regulator to soften the PREP.

On Friday, all attention will be focused on the Non-farm payrolls report on the US labor market. The number of employees is expected to increase by 150 thousand. High indicators can strengthen the growth of the dollar.

Against the background of geopolitical tensions in the Middle East, the USD/JPY pair is also strengthening, reaching 147.0. The Japanese authorities are not planning new currency interventions yet.

In the UK, the index of business activity in the service sector slowed down, but remained steady. The GBP/USD pair is trading around 1.315.

Charot FXMart · Guru

Investor concerns are slowing down the growth of the Brazilian economy

The easing of the monetary policy of the US Federal Reserve and China's intention to stimulate its economy create favorable conditions for Brazil.

Despite this, Moody's, which upgraded Brazil's rating to the highest junk level, could not convince investors. The Brazilian real and the country's stock market are showing weak results.

Experts note that rating agencies are focused on past events, and markets are looking to the future. Since the beginning of 2024, the Brazilian real has lost about 11% of its value, and the benchmark Bovespa Brazilian stock index has declined by 1.9%.

Despite the positive external factors, the Brazilian real continues to fall. Investors fear that the Brazilian economy is overheated, which could lead to a tightening of monetary policy. Last month, the Brazilian Central Bank raised the rate by 0.25% to 10.75% per annum, which also does not inspire optimism.

Charot FXMart · Guru

Oil returned to below $80 after a sharp rise

On Tuesday, oil declined from the area of local highs, as investors began to take profits after a significant increase the day before.

Yesterday, Brent reached new highs since the end of August, breaking the $81 per barrel mark. The current quote of the asset is $79.20 per barrel. North American WTI crude is trading near $75.40 after yesterday's rise to $77.70 per barrel.

Last week, oil strengthened amid geopolitical tensions in the Middle East, where traders fear possible Israeli attacks on Iran's oil facilities. An additional risk arose in the Gulf of Mexico, where Chevron temporarily stopped work on its Blind Faith oil and gas platform due to the hurricane.

The API report on oil and petroleum products reserves in the United States is expected to be released today, preceding the official data of the Ministry of Energy. However, traders are now primarily focused on geopolitics, which has a greater impact on market sentiment.

Charot FXMart · Guru

Bank of America: inflation will remain moderate in September

Bank of America forecasts moderate growth in both the core and core consumer price index in September, indicating stable core inflation without alarming signals.

The bank expects a monthly increase of 0.1% for the main index and 0.3% for the base index. Lower energy prices will soften the growth of the main indicator, while higher rents and used car prices will support the growth of the base indicator.

On an annual basis, Bank of America forecasts a decrease in core inflation to 2.3%, while the core CPI will remain at 3.2%. BofA analysts, based on data on inflation forecasts by component, expect core inflation at 0.18% on a monthly basis.

Despite the fact that inflation continues to move in the right direction, the upcoming report is likely to have no significant impact on the central bank's rate. The findings confirm the possibility of further rate cuts, but do not give grounds for concern about the current inflation rate.

If the report shows an acceleration in the pace of price growth in September, this could be a positive for the dollar, which has been strengthening for eight consecutive sessions at Wednesday's auction.

Charot FXMart · Guru

British economy: growth after two months of stagnation

According to operational data from the Office for National Statistics, published on Friday, the British economy grew by 0.2% in August compared with the previous month.

After stagnating in June and July, following modest but steady growth at the beginning of the year, the UK emerged from a mild recession earlier this year.

The release of economic growth data coincided with the upcoming autumn budget, which Treasury Secretary Rachel Reeves will present at the end of the month. The budget, expected by many, will include tax increases and spending cuts aimed at eliminating the estimated deficit in public finances, estimated at 22 billion pounds ($29 billion). However, the Conservative Party, which ruled the country before the snap elections, denies there is a deficit.

Reeves also did not rule out the possibility of revising the rules on the country's debt obligations in order to attract more investment.

The government claims that these measures are part of its «national renewal» program aimed at restoring optimism in society after warnings about the state of the economy.

Charot FXMart · Guru

Bitcoin at $70,000: market expectations against the background of elections

On Monday, the price of bitcoin reached a three-month high, exceeding $69,500. This growth is associated with increased speculation about the likely victory of Donald Trump in the upcoming elections.

Recent polls and forecast markets show an increase in Trump's chances of winning, which causes increased interest in bitcoin. Trump has repeatedly expressed support for cryptocurrencies, promising to build «the future of bitcoin in America,» even accepting donations in cryptocurrencies during his campaign.

If he wins, traders expect more loyal regulation of cryptocurrencies in the United States, which can be a powerful incentive for the growth of the bitcoin exchange rate.

Experts also note that breaking the $70,000 mark will be a key bullish signal for bitcoin.

At the same time, there are only two weeks left before the vote, which creates instability in the markets. Investors in search of «safe havens» prefer gold and the dollar, which reached a record high on Monday. Despite this, the latest capital movement data shows that institutional investors resumed buying cryptocurrencies last week.

Charot FXMart · Guru

The euro is weakening, the dollar is rising amid the upcoming elections in the United States

The dollar index continues to grow, reaching two-month highs and approaching 104.0.

This growth is due to investors' expectations that the US Federal Reserve will maintain a cautious position on lowering interest rates. Recent economic data show the stability of the American economy, and inflation is decreasing smoothly.

At the same time, the euro continues to weaken after the recent decision of the European Central Bank to cut key interest rates. The situation is aggravated by weak inflation data in Germany, indicating a slowdown in economic growth in the eurozone. The Chinese yuan also weakened against the dollar, returning to 1.5-month highs at 7,125.

Against the background of the upcoming US elections, investors predict a different dollar exchange rate depending on the results of the US elections. Historically, the Republican presidency is associated first with a strong and then a weakening dollar, while Democratic presidents, on the contrary, usually start with a weak dollar, which then strengthens.

In the near future, attention will be focused on the publication of preliminary business activity indices (PMI) for the eurozone, which will provide updated information on economic indicators in October.

Charot FXMart · Guru

Investors are leaving thematic ETFs en masse: AI, video games and other topics are losing popularity

There is a change of favorites in the global investment market. Investors are increasingly moving from exchange-traded funds (ETFs) specializing in certain topics to traditional ETFs linked to stock indexes.

Analyst data indicate that the outflow of funds from thematic ETFs has continued for the third year in a row. This year, $5.8 billion has been withdrawn so far, which already exceeds the outflow for the whole of 2023 ($4.8 billion).

The growth of stock indexes, which are near record highs, is one of the reasons for this phenomenon. The five largest ETFs tracking the S&P 500 and Nasdaq 100 indices have received inflows of $170 billion this year.

Experts believe that investors may prefer the stability and broad diversification offered by index ETFs. They also point out that thematic investing itself involves risks. Choosing the right topic, the stocks that will benefit most from this topic, and accurately determining the time of purchase of the fund — all this requires high qualifications and experience.

This trend may indicate that investors are becoming more conservative in their investments. But it's worth noting that thematic ETFs can return to favor if certain topics, such as AI or the metaverse, show strong growth.

Charot FXMart · Guru

Oil ends the week with growth amid geopolitical uncertainty

The oil market ended the week with growth, recovering some of the losses on Monday and Tuesday. Brent crude futures rose 0.77% to $75.15 per barrel, while U.S. WTI rose 0.85% to $70.79, despite continued uncertainty in the Middle East.

Traders are closely monitoring the development of the situation in the Gaza Strip, where ceasefire negotiations are expected to resume. Tensions in the Middle East caused by Iran's missile attacks and the expected Israeli reaction are putting pressure on oil prices. Some analysts predict that possible strikes on Iran's oil infrastructure could lead to higher prices.

At the same time, expectations regarding China's stimulus policy have a restraining effect on the market. Despite hopes for an increase in oil demand, experts do not expect that Chinese measures will have a significant impact on prices.

Goldman Sachs confirmed its forecast for oil prices at $70-85 per barrel for Brent in 2025, citing that the impact of Chinese incentives will be modest compared to other factors such as the supply of oil from the Middle East.

Charot FXMart · Guru

Oil has fallen in price after Israeli strikes on Iran

On Monday, oil prices fell by more than 5% after Israel's retaliatory actions against Iran did not affect key oil and nuclear facilities. Trading on the oil market began with a sharp decline, and Brent futures fell 5.5% to $71.05 per barrel. WTI contracts also fell by almost 5.8%, trading around $67.20.

Last week, oil prices showed significant volatility, increasing by 4%. The growth was driven by expectations of a wide range of Israeli responses to the Iranian missile attack on October 1.

On Saturday, the Israeli Air Force launched three waves of strikes against military installations near Tehran and in western Iran. However, the absence of strikes on oil and nuclear facilities has led to a decrease in geopolitical tensions and, as a result, to a decrease in the «risk premium» embedded in oil prices.

Analysts note that the market will now focus on negotiations on a cease-fire between Israel and the Hamas group. Some financial institutions, such as Citi, are already revising their oil price forecasts, lowering target levels due to reduced geopolitical risk.

Charot FXMart · Guru

The United States will limit investments in Chinese technology

In an effort to protect its technological interests and contain China's military potential, President Biden's administration took a decisive step. On October 28, the U.S. Treasury Department unveiled new rules that significantly limit investments and technical assistance from American companies in the development of key sectors of the Chinese economy.

The focus turned to technologies that are important for future military, cybersecurity and intelligence operations: semiconductors and microelectronics, quantum computing and artificial intelligence.

The introduction of these rules, which take effect on January 2, is part of a broader U.S. strategy to limit China's access to technologies that can be used to pose a threat to national security.

The Biden administration stresses that the purpose of these measures is to prevent China from receiving «intangible benefits» from US financial support, including improving its reputation, market access and attracting highly qualified personnel.

Charot FXMart · Guru

The European economy grew in the third quarter

In the third quarter, the eurozone economy showed unexpectedly strong growth, reaching 0.4%. France and Spain became the key drivers of this growth, and Germany, which was previously under threat of recession, increased GDP by 0.2%. In Italy, the production level remained at the level of the previous quarter.

Inflation in Spain accelerated slightly to 1.8%, remaining within the ECB's target range of 2%. Consumer prices in Germany rose by 2.4% y/y in October.

Germany still faces challenges such as loss of competitiveness due to high energy costs and a shortage of qualified personnel. Nevertheless, growth in the third quarter was supported by consumer and government spending.

The growth of the French economy is associated with the Olympic Games, as well as with increased government spending, despite the difficult financial situation. Although the increase in French GDP has brought some relief to the government, weak investment figures and a slowdown in consumer spending continue to negatively affect the budget.

Austria also showed growth of 0.3%, while Portugal and Lithuania have seen an acceleration in GDP growth.

Charot FXMart · Guru

Oil soared amid Iran's threats

Tensions in the Middle East have brought the market's attention back to the escalation of hostilities, which has led to a sharp rise in oil prices. Reports of a possible Iranian attack on Israel from Iraq in the coming days forced investors to pay attention to geopolitical risks.

On Friday, Brent and WTI recorded significant growth, exceeding $74.80 and $70.2, respectively. At the beginning of the week, prices fell after a limited Israeli attack in response to rocket fire from Iran, but experts warned that the market «relaxed too quickly.»

Despite some encouraging signals, including the American proposal for a cease-fire in Lebanon and Israel's stated willingness to respond decisively, market participants continue to anxiously observe the growing tensions in the region.

The oil market will be under the close attention of investors in the near future, as a number of key events may significantly affect prices. Next week, the United States will hold presidential elections and a meeting of the highest legislative body in China. Also, the decision of OPEC+ to gradually resume production from December will have significant weight for the price trend.

Charot FXMart · Guru

German industry is looking for salvation abroad

A study conducted in September 2024 among the top managers of 115 industrial companies in Germany revealed alarming trends.

Almost half of the respondents (45%) plan to expand abroad. And only a few companies (13%) are interested in new branches within the country. Moreover, 29% of enterprises reported readiness to transfer jobs from Germany, and only a tiny part (4%) is considering the reverse process of returning immigrated employees.

The results of the study confirm the fears of managers that more than two thirds of the survey participants are confident that the number of jobs in Germany will decrease in the coming years. Only about half expect the situation to improve in five years, while the rest are skeptical about the prospects for the development of the German economy.

Experts point to a number of reasons underlying the current trend. The majority of respondents consider excessive bureaucracy to be the main obstacle to economic recovery. «Wrong policy decisions,» according to almost half of the respondents, also play a significant role in slowing growth. «Insufficient management efficiency» is considered a problem by every fourth participant in the survey.

Charot FXMart · Guru

Copper rises in price on positive signals from China

Copper futures are rising for the third day in a row on the back of positive economic news from China and expectations of new support measures from Beijing.

Activity in the service sector in China increased last month at the fastest pace since July, and recent data also showed an increase in business activity in the industry. These indicators suggest that China's efforts to stimulate the economy are beginning to have an effect.

According to forecasts, at a meeting of the Standing Committee of the National People's Congress, the Chinese government may announce additional support measures.

Metals, including copper, had previously declined in price as initial optimism about China's stimulus measures gave way to doubts. However, this week the markets will also be watching the results of the US elections, which may add volatility. According to Citigroup, copper on election day has typically grown in nine of the last ten election cycles and may temporarily rise in price to $10,000 per ton amid monetary easing in China and the United States, as well as possible changes in tariffs depending on the outcome of the election.

Copper rose 0.43% on the London Metal Exchange and is trading at $9,724.50 per tonne. Aluminum also rose 0.78% to $2,641 per tonne after reports of a decline in inventories in China to the lowest level since February, according to Shanghai Metals Market.

Iron ore futures rose 1.39% to $103.91 per tonne on the Singapore Stock Exchange, continuing a similar rise since Monday.

Charot FXMart · Guru

Bitcoin has updated the historical record amid Trump's victory

On the night of November 6, the bitcoin exchange rate reached a new historical high, exceeding the $75,000 mark.

According to Coinmarketcap, the cost of one bitcoin was $74,909, after which the exchange rate decreased slightly and began to grow again, stopping at $74,500.

On the Binance exchange bitcoin was briefly trading at exactly $75,011.

The growth of bitcoin occurred against the background of the US presidential election held yesterday, as a result of which Donald Trump, known for his support of cryptocurrencies, won. This has caused optimism among investors who expect positive changes for the digital asset market.

Bitcoin set the previous record in March 2024, when its exchange rate reached $73,777.

Charot FXMart · Guru

The price of oil is falling amid the rising dollar

On Thursday, the price of oil continued to fall after the US presidential election, succumbing to the pressure of the rising dollar.

The price of Brent decreased by 0.6% to $74.15, and WTI — by 0.88% to $70.97. Experts note that the strengthening of the dollar and weak demand are putting pressure on the price of oil. At the same time, potential price growth factors are associated with the possibility of tougher sanctions against Iran and Venezuela, as well as the risks of geopolitical aggravation in the Middle East.

Analysts believe that in the short term, oil prices may continue to decline unless serious geopolitical events occur. Other experts believe that Trump's policy aimed at supporting business can contribute to the growth of the economy and fuel demand. However, intervention in the Fed's easing policy may have a negative impact on the oil market.

Additional pressure on prices is exerted by a decrease in oil imports to China and an increase in oil reserves in the United States. It is expected that Trump will resume the policy of sanctions against Iranian oil, which may lead to a reduction in supplies. This, in turn, may have an impact on prices in the future.

Charot FXMart · Guru

Bitcoin has broken the historical maximum of $81000

The bitcoin exchange rate exceeded $81,000 for the first time after Donald Trump's victory in the US presidential election. Traders expect a relaxation of cryptocurrency regulation by Trump, who has previously expressed his support for them.

On Monday, bitcoin rose 2.8% to $81,241. Over the past week, the growth was 14%, over 25% in a month, and over 100% in a year.

Republicans, in addition to Trump's victory, are approaching full control of Congress. This will allow the new administration to implement policies that will support cryptocurrencies.

Experts suggest that the new administration will bring positive changes, in particular, in the work of the Securities and Exchange Commission. These changes will lead to a softer regulatory stance on digital assets.

They also note that the increased demand for bitcoin is due to a combination of favorable factors: reduced regulatory risks, improved financial conditions and optimistic macroeconomic prospects for the United States.

Charot FXMart · Guru

Oil continues to fall: weak demand and strengthening of the US dollar

Oil continues its rapid decline, experiencing the most serious drop in two weeks. Weak demand in China, a strong US dollar and fears of oversupply are putting negative pressure on prices.

Brent futures fell almost 3% on Monday and are trading below $72 per barrel. WTI prices also fell to $67.78, losing about 0.37%.

China's recent efforts to stimulate the economy have not met investors' expectations, and inflation in the country remains low. At the same time, the US dollar index has reached new multi-month highs, which makes oil more expensive for most buyers.

The oil market has been in a relatively narrow range since the middle of last month, but now the outlook remains weak. Oil supply is expected to exceed demand next year. OPEC's monthly market report, expected later on Tuesday, may shed light on the prospects for market balance.

Experts note that significant factors are needed to change the negative trend in the oil market, such as the postponement of the return of OPEC+ oil production or the imposition of US sanctions against Iran.

Charot FXMart · Guru

Economic expectations in Germany are falling amid the US elections

November brought negative news for investor and analyst sentiment in both Germany and the eurozone. The data from the economic expectations index clearly show a decline in optimism.

The German index fell to a modest 7.4 points from 13.1 points in October. This sharp decline, significantly exceeding the projected 13 points, is primarily due to unstable political events both inside and outside Germany.

Donald Trump's victory in the US presidential election has caused a noticeable negative impact on economic expectations. While the economic recovery is growing in the United States, the situation in the eurozone and China, on the contrary, is deteriorating.

In parallel with the drop in the expectations index, the assessment of the current economic situation also decreased to -91.4 points, reaching the lowest level since May 2020.

The situation in the eurozone is not much better: the index of economic expectations fell to 12.5 points from 20.1 points, not meeting forecasts for growth to 20.5 points. The assessment of the current economic situation in the eurozone also decreased by 3 points, reaching -43.8.

Charot FXMart · Guru

China has prepared countermeasures in case of increased trade competition with the United States

China has prepared effective countermeasures in case the trade standoff with the United States intensifies under the leadership of new President Donald Trump.

During Trump's first term, Beijing was not prepared for Washington's tough moves, including the imposition of increased tariffs and tighter controls on Chinese investments. However, over the past eight years, China has significantly strengthened its position by passing laws that allow foreign companies to be blacklisted and restrict U.S. access to critical supply chains.

Today, Beijing has legislative tools to counter sanctions imposed by other countries, and has compiled a «list of unreliable organizations» that undermine China's national interests. In addition, the expanded law on the control of exports of dual-use goods allows China to use its dominant position in global markets for the supply of key resources as an instrument of pressure.

A number of analysts believe that many underestimate the possible damage that China can cause to the US economy. An example is the recent ban on the supply of components for the largest American drone manufacturer Skydio, which supplies equipment for Ukraine as well. These sanctions make it difficult to access critical components needed for production.

After winning the election, Donald Trump should succeed Joe Biden in January 2025. In his election campaign, he promised to abolish the most-favored-nation status in trade with China, which will allow any tariffs to be imposed, and also announced his intention to "divide" Russia and China in order to weaken their strategic alliance.

Charot FXMart · Guru

Why the US Dollar Will Continue to Strengthen

Yesterday, the euro and pound quickly lost ground against the US dollar after Federal Reserve Chair Jerome Powell confirmed traders' concerns by stating that recent data provides the central bank with room to lower interest rates cautiously.

"The economy is not signaling any need for us to rush into rate cuts," Powell said on Thursday in Dallas. "The current state of the economy allows us to approach our decisions cautiously."

The Fed began lowering borrowing costs in September with an aggressive half-point cut, followed by a quarter-point reduction last week. The Fed indicated readiness to continue lowering rates if inflation remains subdued. However, Powell's remarks align with several colleagues who advocate for a more gradual approach to future rate cuts.

Powell's comments have tempered market expectations for a December rate cut. Policy-sensitive two-year Treasury yields rose by eight basis points to 4.36%, while swap traders reduced the odds of a December rate cut to less than 55%, down from about 88% the day before.

Powell also addressed recent data, noting that inflation remains on a bumpy path: "The economy shows no urgency for rate cuts, as inflation demonstrates some signs of picking up," Powell stated on Thursday. He added that uncertainty about the neutral rate—where policy neither stimulates nor restrains growth—warrants caution. This week, several Fed officials highlighted the importance of defining the new neutral rate as a key factor in shaping future policy.

"We should be cautious in this environment," Powell said. "As the central bank approaches the plausible range of neutral levels, it may be the case that we slow the pace of what we're doing."

As I noted above, recent data showed that headline inflation in October remained unchanged, while the core Consumer Price Index (CPI), excluding food and energy costs, rose 0.3% for the third consecutive month. "Inflation is approaching our long-term 2% target, but it hasn't reached it yet," Powell said. "We are committed to finishing the job. With labor-market conditions in rough balance and inflation expectations well anchored. I expect inflation to continue its descent toward 2%, albeit on a bumpy trajectory."

Powell refrained from commenting on the likelihood of a December cut.

Monetary policy could face new headwinds following President-elect Donald Trump's potential tax cuts, immigration restrictions, and tariffs. Political uncertainty may further reinforce the Fed's cautious stance on rate cuts.

The US dollar has gained significant strength over the past two weeks and now dominates the forex market.

As for the current technical picture of EUR/USD, buyers need to reclaim the 1.0580 level to target a test of 1.0615. A move beyond this level could lead to 1.0655, although such progress will require support from major market players. The most distant target is 1.0690. If the trading instrument declines in 1.0540, I expect major buyers to take action; failing that, it would be good to wait for the 1.0495 low to be updated or to open long positions from 1.0460.

As for the current technical picture of GBP/USD, pound buyers need to break through the nearest resistance at 1.2680 to aim for 1.2725, above which breaking through will be quite problematic. The furthest target will be 1.2760, followed by a potential sharp rally to 1.2796. Bears will aim to regain control of the 1.2630 area if the pair declines. A breakdown here would deal a significant blow to bullish positions, pushing GBP/USD toward 1.2585, with a further target at 1.2550.

Charot FXMart · Guru

Electricity prices in Germany have soared to record levels

In Germany, electricity prices have peaked in the last 12 months. The driver of growth was the upcoming cold snap and a decrease in the production of renewable energy sources.

Futures for next month in Europe's largest economy rose 4.4%, reaching their highest value since October last year.

Despite a relatively mild autumn, a colder winter is expected in most of the continent, which will lead to increased demand for electricity and natural gas. Weather forecasts point to lower temperatures in the coming days, especially in Berlin, where temperatures are expected to drop to 1°C.

A decrease in the projected wind energy production in Germany for most of this week also has a negative impact on the market.

The cold weather also encourages utilities to consume more natural gas from storage facilities, which contributes to higher fuel prices. Uncertainty about supplies from Russia adds even more risks to the market.

As a result, the price of electricity in Germany for the next month increased to €108 per MWh, and in France – to €101.5.

Charot FXMart · Guru

ECB: AI bubble threatens financial stability

The European Central Bank (ECB) has expressed alarm about a possible bubble in the stock market related to artificial intelligence (AI).

In its semi-annual financial stability review, the ECB noted that the stock market, especially in the United States, is increasingly dependent on several companies considered leaders in the field of AI. This concentration raises concerns about the possibility of an AI asset bubble. Investors demand a low premium for owning stocks and bonds, and funds have reduced their cash reserves, which can cause a shortage of cash and forced asset sales.

The central bank warned that if investors' expectations for the revenues of these companies are not met, then a sudden drop in asset prices may occur, which threatens adverse global consequences.

The ECB expressed concern about the low liquidity of assets and the reduction of funds' cash reserves, which could lead to forced asset sales and a decrease in their value. Among other risks, the ECB noted the vulnerability of the eurozone to trade fragmentation and possible negative consequences from the introduction of tariffs, as well as an increase in borrowing by eurozone countries at higher interest rates.

Charot FXMart · Guru

Bitcoin has reached a historic high, exceeding the $97,000 mark

Investors continue to actively invest in cryptocurrency, expecting favorable policy changes under the new president. This was reflected in the bitcoin exchange rate, which increased by almost 6% and reached $97,458.

Shares of cryptocurrency-related companies are also showing growth. MicroStrategy, one of the largest companies investing in bitcoin, rose 3% after a previous increase of more than 10%.

The rise in the price of BTC is due to hopes for a more loyal attitude towards cryptocurrencies from the new government. It is assumed that Trump may introduce more flexible regulation and even consider the possibility of creating a national strategic reserve of bitcoin. Experts predict that the price of bitcoin could reach $100,000 this year and double by the end of 2025.

Analysts also note that the growth of the bitcoin exchange rate is associated with improved liquidity, increased institutional interest and a more favorable regulatory environment. In 2024, bitcoin has already grown by more than 127%.

Charot FXMart · Guru

Kuwait will spend more than $30 billion to increase oil production

Kuwait Petroleum Corp. (KPC) intends to invest about 10 billion Kuwaiti dinars ($33 billion) over five years to increase oil production. According to CEO Sheikh Nawaf Al-Sabah, the company plans not only to maintain the current capacity, but also to significantly increase it in accordance with strategic goals.

According to Nawaf, Kuwait's forecast for stable oil demand until the middle of the century coincides with the expectations of such major market players as TotalEnergies SE and Vitol Group. However, the International Energy Agency (IEA) suggests that global oil use will peak by 2030 due to the shift to electric vehicles and renewable energy sources.

KPC's investments are part of a large-scale program worth 20 billion dinars, launched in April and covering the entire spectrum of the oil industry – from production to petrochemicals. In 2024, the company intends to reach a production capacity of 3.2 million barrels per day, and by 2035 to increase this figure to 4 million barrels.

Today, Kuwait is one of the ten largest oil producers, producing about 2.5 million barrels daily, and continues to strengthen its position in the global energy sector.

Charot FXMart · Guru

Bitcoin has stabilized after rising to $100,000

After the rapid growth that raised bitcoin to the $100,000 mark, the exchange rate of the digital asset decreased slightly and stabilized. On Sunday, it fell to $95,611, and on Monday it is trying to stay at $98,402. According to experts, bitcoin's growth was so rapid that investors began to fear a correction.

Some analysts note that bitcoin has almost reached the symbolic level of $100,000, which for supporters of cryptocurrencies is an important frontier that refutes skeptical opinions. However, in their opinion, a period of consolidation may come before a sustained breakthrough above this level.

The impact of Donald Trump's victory on the bitcoin exchange rate cannot be underestimated. Since his victory, there has been growth in the digital asset market, and the total value has increased by about $1 trillion. Trump promised more lenient regulation of cryptocurrencies and the creation of a national bitcoin reserve, which has a positive effect on investor sentiment.

Interest in bitcoin is growing not only among private investors, but also among large financial institutions. For example, Cantor Fitzgerald LP is in talks with Tether Holdings Ltd. about support for its lending program, which will accept bitcoin as collateral.

Charot FXMart · Guru

Oil fluctuates amid a truce in the Middle East and a reduction in reserves in the United States

On Wednesday morning, oil prices showed slight fluctuations, reflecting the impact of both signals of a reduction in fuel reserves in the United States and news of a truce between Israel and Lebanon.

Brent futures rose slightly, trading at $72.86 per barrel, slightly above the closing level of the previous session ($72.81). A similar trend is observed in the WTI oil market, which is trading at $68.79 per barrel.

The truce between Israel and Lebanon, announced by US President Joe Biden, has become a positive factor for the market, reducing geopolitical risks. At the same time, Israeli Prime Minister Benjamin Netanyahu stressed that the duration of the truce will depend on the situation in Lebanon.

Market expectations regarding oil reserves in the United States also have an impact on prices. Data from the American Petroleum Institute (API) showed an unexpected decrease in inventories by 5.94 million barrels, which supported oil prices. Official data from the U.S. Department of Energy will be released tonight.

Charot FXMart · Guru

Britain fears Trump's trade restrictions

Britain cooperates closely with the United States in trade, exporting Land Rover cars, equipment, chemicals and medicines there. This dependence makes British businesses vulnerable to the trade plans of Donald Trump, who promised to raise tariffs on imports.

The United States is a key market for 9 of the 15 sectors of British exports, which is more than Germany and France. Despite the significant services sector, the export of goods is important for the British economy.

The American market is also important for AstraZeneca and GSK Plc pharmaceutical companies, which receive a significant portion of their sales in the United States. The total volume of trade between the two countries exceeded £300 billion in a year, and the United States is currently the UK's largest trading partner.

Nevertheless, analysts warn that even if the impact of Trump's tariffs is limited, his protectionist policies could negatively affect jobs, incomes and growth. In the worst case scenario, Trump's trade policy could lead to a decline in UK GDP of more than 1%. Even if Trump chooses a more moderate approach, the uncertainty of his plans is likely to have a negative impact on demand.

Charot FXMart · Guru

Dollar at the bottom: the biggest drop in three months

The US dollar is experiencing a significant drop, which may be the largest in the last three months. Investors are reconsidering their position in relation to the so-called «trump trade», which led to the growth of the currency after his election victory.

The US currency index fell by 0.2% on Friday, increasing the decline this week to 1.1%, and remains at 105.

Trump's recent threats to impose tariffs and the appointment of Scott Bessent to the post of US Treasury Secretary, which is associated with government spending cuts, have caused unrest in financial markets. This led to a decrease in US Treasury bond yields and an increase in the long-term positioning index.

Experts believe that the fall in the dollar is also caused by exhaustion after a long period of growth that began after Trump's victory. The dollar is expected to fluctuate in the coming months before Trump's inauguration, when his economic policy will become clearer.

Charot FXMart · Guru

Trump threatens the BRICS countries: 100% tariffs for attempts to move away from the dollar

Donald Trump expressed concern about the intentions of the BRICS countries to create an alternative currency to the US dollar. He warned that in the case of such a step, he could introduce tariffs at the level of 100%.

Trump also said that the idea that the BRICS states can move away from the dollar is no longer relevant. He urges these countries to guarantee that they will not develop a new currency for the BRICS and will not support any other currencies that could replace the powerful dollar. Otherwise, they risk losing access to the US market.

During his election campaign, Trump repeatedly stressed that moving away from the dollar would have serious consequences for countries that decided to take such a step. His team is discussing measures aimed at punishing both allies and opponents who want to conduct bilateral trade in their currencies, ignoring the dollar. Among the options under consideration are export restrictions, accusations of currency manipulation and various trade fees.

Trump has consistently argued that the US dollar should remain the global reserve currency. In an interview, he noted that he would not allow countries to move away from the dollar, as this would be a serious blow to the country's economy.

Charot FXMart · Guru

Elon Musk files a fourth lawsuit against OpenAI

Elon Musk continues his legal battle with OpenAI, filing another lawsuit that calls into question the legitimacy of its commercial activities. According to Musk, OpenAI's actions create obstacles for other companies in the field of artificial intelligence in attracting investments and contribute to the emergence of unequal conditions of competition in the market.

The lawsuit alleges that OpenAI uses confidential information and interacts with Microsoft in ways that may violate the principles of fair competition.

The lawsuit, which involves not only Musk but also other high-profile industry participants, highlights the growing tensions around ethics and commerce issues in the field of AI. This is Musk's fourth lawsuit against OpenAI, and he expresses concern that the company has deviated from its original course as a non-profit organization created for the benefit of humanity.

This situation raises important questions about the future of artificial intelligence regulation, as well as how AI companies should balance commercial interests and ethical obligations to society.

Charot FXMart · Guru

The British stock market is declining due to a record number of acquisitions

The London stock market is shrinking at the fastest possible pace due to active mergers and acquisitions. The number of delisting companies increased by 10% this year, the volume of transactions with British firms increased by 81%, exceeding $160 billion.

Foreign private capital is actively working in the market, as British stocks are attractive to investors due to a discount of more than 40% to their global counterparts. The main goals are medium-sized companies in the AIM market with low trading volumes and minimal analysis.

Experts warn of the risks of losing the UK's position in the financial market, as companies face difficulties in raising capital. This year, only 11 IPOs worth $1 billion took place on the London Stock Exchange, which is 11% less than last year.

At the same time, regulators are reviewing listing rules to attract more IPOs and hope to increase activity after their implementation. A decrease in the number of companies is also observed in other markets, which is associated with a decrease in the benefits of publicity and the activation of funds. Some experts believe that a wave of acquisitions can revitalize the market, returning funds to investors for new investments.

Charot FXMart · Guru

The Bank of England may reduce the rate four times in 2025

The Bank of England is considering a fourfold interest rate cut in 2025 as inflation slows faster than expected. In the November forecast, the regulator has already laid out such a scenario in order to return inflation to the target of 2%.

After the statement by the head of the Bank of England, Andrew Bailey, the market reacted with an increase in expectations of monetary policy easing. At the moment, investors estimate the probability of a rate cut of 83 basis points by the end of 2025, which implies three or four downgrades.

Risks of a trade war and inflation

The Bank of England also takes into account external risks, including a possible escalation of the trade war if the United States imposes new tariffs after Donald Trump's election victory. This may complicate UK inflation forecasts, as the impact of trade barriers on prices will depend on the response of other countries.

Market impact and warning of deregulation

An additional factor influencing inflation will be the UK's October budget. Bailey stressed that excessive financial deregulation can lead to risks, but should not hinder economic growth.

Charot FXMart · Guru

Oil prices are rising amid political instability in Syria

On Monday, oil prices jumped after reports of the overthrow of Syrian President Bashar al-Assad by the opposition, which increased fears of an escalation of instability in the Middle East. Brent futures rose by 1.17%, reaching $72 per barrel, and WTI – by 1.32%, to $68.20.

Traditionally, any geopolitical aggravation supports the oil market, but the recent price cuts by Saudi Arabia and the extension of OPEC+ production cuts may weaken the market at the end of the year, as these actions indicate a reduction in demand from China.

Saudi Aramco has lowered prices for Asian buyers to the lowest level since the beginning of 2021. And OPEC+ at a meeting on Thursday postponed the increase in production until April and extended the reduction until the end of 2026. Production growth in the United States, meanwhile, is growing – the number of drilling rigs in the United States has reached its highest since mid-September.

Despite the oversupply in 2025, prices for Brent and WTI declined for two weeks in a row. Investors are preparing for a report on inflation in the United States, which may affect the Fed's policy. Analysts also warned that even with a possible Fed rate cut, concerns about a global economic slowdown will remain relevant.

Charot FXMart · Guru

Germany introduces a temporary budget amid the dissolution of parliament

The German Finance Ministry has decided to introduce a temporary budget for the beginning of 2025. The reason for this step was the actual collapse of the coalition government of Chancellor Olaf Scholz and preparations for early parliamentary elections scheduled for February 23.

Finance Minister Joerg Kukis has initiated a special anti-crisis mechanism for managing public spending. The Interim Government will manage finances based on a pre-prepared draft budget until a new administration is formed.

The Interim Budget imposes limits on spending based on legislated commitments that are vital to the country's work. These include unemployment benefits, child support payments, student scholarships, and the continuation of ongoing or planned construction initiatives.

The need to introduce a temporary budget arose after the coalition parties failed to agree on a budget for 2025 in November. As a result, Chancellor Scholz dismissed Christian Lindner from the post of Finance minister. It is expected that on Monday the deputies will approve the procedure for the dissolution of parliament, which will create conditions for early elections.

Charot FXMart · Guru

OPEC+ fears an increase in oil production in the United States under Trump

OPEC+ expresses concern about a possible increase in oil production in the United States after Donald Trump returns to the White House. The expansion of U.S. supplies could undermine the alliance's efforts to maintain prices and reduce its market share.

OPEC+, which produces about half of the world's oil, recently extended production restrictions until the end of 2026 due to weak demand and production growth in the United States and other countries outside the alliance. At the same time, the United States continues to hold the lead, providing 20% of global supplies.

The US shale boom has long been a challenge for OPEC. Now, delegates note that a possible easing of environmental policy under Trump may stimulate further production growth.

«Trump's return may be a boon for the American oil industry, but it's bad news for us,» said a representative of one of the OPEC+ member countries.

An additional increase in production in the United States jeopardizes the alliance's plans to increase production from April 2025, as this could trigger a collapse in prices. Trump, in turn, plans to increase production in order to lower energy prices and fight inflation, which he promised voters.

Charot FXMart · Guru

Powell staged a sell-off: Nasdaq fell by 3.5%, bitcoin went below $100,000

At the last meeting, the Fed, as expected, cut the rate by 0.25%. This decision was taken into account by the markets in advance, but the revised forecasts for rates caused a sharp reaction in the financial markets.

Fed Chairman Jerome Powell said that in 2024, only two rate cuts are expected instead of the four previously envisaged. «We have reached the current level quickly, but we will move more slowly in the future,» Powell stressed at a press conference.

The markets reacted by falling. The Fed's tougher tone hit risky assets:

- The Dow Jones fell 2.58%, ending trading at 42,326.87 and recording its first 10-day losing streak since 1974.
- The S&P 500 declined 2.95% to 5,872.16.
- The Nasdaq Composite lost 3.56% to 19,392.69.

Cryptocurrencies have also come under pressure. Bitcoin, which had previously updated its high above $108,000, dropped to a weekly low of $98,844 in just a few hours. However, it later recovered and rose again above the psychological mark of $100,000. The current BTC quote is $101,543.

Pressure on bitcoin was exerted by Powell's statement that the Fed cannot legally own bitcoin, and any changes to this rule depend on Congress. Recall that following the results of the November elections, the Republican Party gained full control of the US Congress.

Charot FXMart · Guru

The Bank of England suspends rate cuts due to rising inflation

On Thursday, the Bank of England concluded its last meeting of the year, leaving the key rate unchanged. This decision turned out to be expected, given that inflation in the UK has reached an eight-month peak. Economists feared that raising rates could have a negative impact on the economy, which is already experiencing difficulties.

Earlier this year, the Bank of England has already cut the key rate twice, reducing it from 5.25% to 4.75%. Nevertheless, the latest data on rising inflation in November and higher wages in the summer forced financial markets to reconsider their expectations about possible interest rate cuts in the future. Market participants now assume that next year the decline will be about 50 bps, which is lower than the previous forecast of 70 bps.

The Bank of England's decision followed a move by the US Federal Reserve, which also cut rates by a quarter point. Although the decline was expected, traders were surprised by the central bank's assumption that further rate cuts would be negligible, only twice in 2025.