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Inflation Data, Central Bank Signals & Commodity Rebounds In Focus

2 weeks ago

Global markets are set for a pivotal week as inflation readings from the UK and Eurozone take center stage, offering critical clues on the monetary policy trajectory for the Bank of England (BOE) and the European Central Bank (ECB). With a roster of policymakers from both institutions scheduled to speak, investors are primed for fresh insights into how these central banks plan to navigate persistent price pressures amid evolving economic conditions.

In Asia, China’s major banks are widely expected to maintain their loan prime rates steady after a reduction in October, signaling a pause in monetary easing as policymakers assess the economy’s stabilization efforts.

In commodities, oil prices staged a recovery after last week’s losses, buoyed by cautious optimism despite ongoing concerns about oversupply and waning demand from China, the world’s largest crude importer. Meanwhile, gold prices rebounded sharply following their steepest weekly drop since 2021. The recovery comes as the US dollar steadied and traders recalibrated their expectations for Federal Reserve rate cuts.

Currency markets remain active, with the yen slipping further after comments from Bank of Japan Governor Kazuo Ueda. Ueda reiterated that the timing of any policy adjustments would hinge on economic data and inflation dynamics, as the central bank looks ahead to its next meeting on December 18-19. The Dollar Index, meanwhile, remained steady as traders weighed mixed signals from the US economy and the global inflation landscape.

As markets digest this week’s developments, the interplay of inflation data, central bank rhetoric, and commodity price movements is expected to set the tone for global financial markets heading into the year-end.

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