Market Report: rate cuts, data dumps, and Gold near record highs
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “UK markets have a clear focal point this week, with the Bank of England in the spotlight and a rate cut on Thursday widely seen as a done deal. Markets are pricing in around a 90% chance of a move, so, absent any shocks, the decision itself matters less than the Bank’s tone. Beyond domestic policy, UK assets will also take cues from the flood of delayed US economic data, making this a week where macro forces are firmly in the driving seat.
US markets are trying to find their feet, with futures pointing to a firmer open as dip-buyers step back in, hopeful that a Santa rally can still materialise after Friday marked the S&P 500’s worst session since 20 November. Attention now shifts to a heavy week of economic data, with a backlog of delayed releases finally hitting the tape following the government shutdown. The spotlight is firmly on Tuesday’s jobs report and Thursday’s inflation print, both of which could sway expectations for when, and how fast, interest rates might come down. Markets are tentatively pencilling in two cuts next year, but we know from history that these predictions can easily change.
Gold continues to sparkle, hovering just shy of record highs as investors wait on a packed slate of US economic data for fresh clues on the Federal Reserve’s next move. The precious metal is up more than 60% this year, on track for its strongest annual performance since 1979, fuelled by strong central‑bank buying, safe‑haven demand and a sweet spot of cooling US rates alongside inflation that’s expected to stay higher for longer.
Oil prices steadied in early trading, with Brent crude climbing back to around $61 a barrel after last week’s sharp sell-off, as nerves around global politics outweighed worries about too much supply. The US turned up the heat on Venezuela by seizing a tanker, adding fresh sanctions, and increasing its military footprint in the region – reminding markets how quickly tensions can disrupt energy flows. At the same time, traders are keeping an eye on Ukraine peace talks in Berlin, aware that developments could send ripples through the market.”