The global markets were influenced by the ongoing conflict in Ukraine, with concerns rising about a potential escalation. European equities and yields experienced a significant drop, leading to a risk-off sentiment in the market. The dollar saw a gain against the euro but weakened against the yen. Despite this, equities managed to make a slight recovery, with the EuroStoxx 50 trading relatively unchanged.
In the US, stocks also opened in a similar manner, with interest rate markets showing European yields failing to build on recent gains. German yields declined across the curve, while US Treasuries underperformed. Although weekly jobless claims decreased, the disappointing Philly Fed business outlook offset some of the positive news. There is still uncertainty in the market regarding the possibility of a Fed rate cut in December.
In the realm of foreign exchange markets, the dollar initially showed strength due to the situation in Ukraine but later lost momentum. The euro remained vulnerable, hovering near recent lows. CEE currencies also struggled, with the Czech koruna and the zloty facing resistance levels. The forint also faced challenges in returning to previous levels.
In other news, Statistics Norway reported growth in the mainland economy, excluding the offshore energy industry. Manufacturing and mining sectors showed growth, while construction continued to decline. The Norges Bank reaffirmed the need for a restrictive monetary policy, with gradual easing expected in the future.
The Central Bank of the Republic of Turkey decided to keep its policy rate unchanged, citing progress in easing inflation. Despite challenges, the CBRT remains committed to maintaining a tight monetary stance to bring down inflation and improve economic conditions. The lira has shown some improvement against the euro but remains weak against the dollar.
Overall, the global markets continue to be influenced by geopolitical events and economic data, with investors closely monitoring developments for potential opportunities and risks. It is essential for market participants to stay informed and cautious in their decision-making to navigate these uncertain times successfully.
