Market Impact: 5% Decline in Bond Yields as Eurozone Consumer Confidence Dips

Market News Summary

Consumer sentiment in the Eurozone has worsened during the current October, according to preliminary data released by the European Commission on Monday. The Consumer Confidence Index in the Eurozone, which includes 20 countries, decreased to -17.9 points this month compared to -17.8 points last month, while analysts had expected it to drop to -18.3 points.

Traders are anticipating several events this week, including the European Central Bank meeting, the release of US Gross Domestic Product data, and the preferred inflation gauge of the Federal Reserve.

Dollar Index (USDX)

The US dollar declined against a basket of currencies yesterday, following the retreat of US Treasury bond yields from the earlier 5% level they reached during the session. Traders are awaiting new US economic data scheduled to be released later this week.

Furthermore, the yield on US 10-year Treasury bonds dropped on Monday after briefly rising above 5.0%, reaching a level not seen since July 2007. It had briefly attempted to extend its reach the previous week and posed a greater threat to economic slowdown due to increased borrowing costs.

Pivot Point: 105.60

Spot Gold (XAUUSD)

Gold prices, often sought as a safe haven, experienced a slight decline on Monday, momentarily halting their upward momentum that had taken them close to the $2,000 mark in the previous session. Traders are closely monitoring further developments in the Middle East conflict and upcoming US economic data.

The spot price of gold saw a 0.3% decrease, resting at $1,976.19 per ounce. Meanwhile, US gold futures settled 0.3% lower at $1,987.80.

Pivot Point: 1972

Dow Jones Index (DJ30ft – US30)

The US stock indices closed with mixed results on Monday as bond yields fell, diverting investor attention toward corporate earnings and economic data. Investors are eagerly anticipating the results of about one-third of the listed companies this week, including giants like Microsoft, Alphabet, and Amazon.

Among the 86 companies in the S&P 500 that have reported their earnings, a remarkable 78% have surpassed expectations. Currently, there are expectations that third-quarter earnings will grow by a modest 1.2% on a yearly basis, slightly lower than the 1.6% anticipated earlier this month.

The Dow Jones index declined by approximately 0.6%, equivalent to 191 points, marking its fourth consecutive daily loss. In contrast, the Nasdaq index rose by about 0.3%, rebounding from its lowest levels in five months, supported by interest-rate-sensitive stocks following the decline in bond yields.

Pivot Point: 33165

US Crude Oil (USOUSD)

Oil prices declined by more than 2% on Monday as diplomatic efforts in the Middle East were strengthened in an attempt to contain the conflict in Gaza, reducing investor concerns about potential supply disruptions.

Brent crude futures dropped by $2.33, equivalent to 2.5%, settling at $89.83 per barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures decreased by $2.59 or 2.9% to $85.49 per barrel at the close.

Pivot Point: 86.55

Risk Warning

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