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2025-09-12 17:16:47
Risk aversion spreads, safe-haven asset prices surge. ⑴ Markets are betting on more aggressive interest rate cuts from the US Federal Reserve (Fed), which could lower global borrowing costs and provide a respite to the stressed bond market while also weighing on the US dollar. Global stock markets are on track for weekly gains, with the MSCI World Index having risen 1.7% as of Friday. ⑵ Notably, gold prices continued to rise, on track for their fourth consecutive week of gains this week, approaching a record high, demonstrating persistent investor concerns about global economic uncertainty. Asian stock markets also saw sharp gains, with Chinese stocks reaching a 3.5-year high, primarily boosted by expectations of earnings growth for AI-related companies. ⑶ Although the US Consumer Price Index (CPI) showed some price increases, markets were generally focused on last week's weak employment data. Analysts predict the Fed will cut interest rates by a cumulative 125 basis points over the next five meetings. Market futures prices indicate a 93% probability of a 25 basis point rate cut next week. ⑷ The European Central Bank (ECB) kept interest rates unchanged and hinted that they were "well-positioned," cooling market expectations for further rate cuts in the near term. ECB sources indicated that the December meeting will be a key point in the debate over whether further rate cuts are needed to cushion the economy. The British pound fell slightly after data showing stagnant UK economic growth was released. ⑸ Crude oil prices came under pressure due to the International Energy Agency's (IEA) forecast of a record oil surplus next year, with Brent crude futures remaining largely flat.
