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Global markets begin the week with a high degree of optimism, mainly fuelled by quarterly numbers from Nvidia. On the other hand, continuing speculation on the intentions of the newly announced monetary policy of the Bank of Japan (BOJ) has caused market-wide confusion.
Wall Street is closely watching Nvidia's third-quarter report, scheduled to be released on November 20, 2024. The global chip leader is expected to report a substantial increase in revenue, reflecting its dominance in the AI sector.
Nvidia stock have surged nearly 200% so far in 2024, playing a major role in the S&P 500's record-breaking rally. It is no wonder then, that Nvidia has become the world's largest company overtaking Apple with a market cap of US$3.43 trillion.
Nasdaq futures rose 0.6% and S&P 500 futures increased 0.25% before the report from Nvidia. Thus, showcasing the AI chipmaker's influence in the market.
The BOJ Governor Kazuo Ueda stated that rate hikes will depend on economic and inflationary developments while refusing to comment if a hike would occur in December. This ambiguity puts markets in a quandary regarding Japan’s central bank's short-term policy outlook.
The yen fell by a small margin after the speech of Ueda and was trading at around 155 per dollar. Japan's Nikkei index lost 0.76% as the healthcare stocks declined.
The BOJ may take some time before altering the rate unless the dollar-yen exchange breaches the 160 level, according to market analysts.
Markets rallied in other regions in Asia. Hong Kong's Hang Seng Index gained 1.5 percent, while China's CSI300 and Shanghai Composite advanced 1.22 percent and 1.34 percent, respectively. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent.
European traders are waiting for the European Central Bank (ECB) speeches this week. Economic data slowing and concerns about US tariff impacts may render the speech to be on the cautious side.
US Treasury yields held near multi-month highs. Expectations of a less aggressive cycle of Federal Reserve rate cuts have supported these gains.
The benchmark 10-year yield reached 4.43%, while the two-year yield remained at 4.30%. Futures give a 60% chance of a rate cut in December, but market expectations are that Fed officials will proceed cautiously. The dollar continued its strong run and edged closer to a one-year peak against currencies in other nations.
Oil, meanwhile, posted a modest gain. Brent crude advanced 0.18% to approx. US$71 a barrel, and US oil futures gained 2.02%, climbing up to US$67 a barrel. Spot Gold jumped 1.24% to US$2,593 an ounce, rebounding from last week's decline.
Investors will see many critical market-moving events this week like the release of the Quarterly earnings report by Nvidia, and speeches by Feds and ECB policymakers. Given the ongoing inflation and monetary policy themes of late, higher volatility can be expected in global markets.
