Market Information Tuesday 10 December 2024

Gold prices reached a two-week high, climbing over 1% due to renewed gold purchases by China’s central bank after a six-month break. Spot gold increased by 1.1% to $2,662.98 per ounce, and U.S. futures rose 1% to $2,685.50. China’s role as the top gold buyer in 2023 underscores the importance of central bank activities in supporting gold’s rally amid anticipated U.S. Federal Reserve rate cuts and geopolitical tensions.

In November, China’s consumer price inflation fell to a five-month low, rising just 0.2% year-on-year, missing expectations of a 0.5% increase. Core inflation saw a slight rise, indicating moderate price pressures. Despite a decline in the producer price index (PPI) for the 26th consecutive month, the decrease was less severe than forecasted. Persistent low inflation highlights China’s struggle with weak domestic demand amid ongoing deflationary pressures in wholesale prices. While Beijing has implemented extensive stimulus measures, signs of economic recovery are visible in retail and manufacturing growth. However, forecasts expect deflation, influenced by factors like the U.S.-China trade tensions.

The Reserve Bank of Australia (RBA) maintained interest rates at 4.35% in its final meeting of the year, signaling a softening stance as it gains “some confidence” that inflation is moving toward its target range. The Australian dollar fell by 0.8% to $0.6380, and three-year bond futures rallied, indicating market expectations of a potential rate cut by April next year. Although Governor Michele Bullock emphasized that underlying inflation remains too high for immediate rate cuts, the market interpreted the omission of prior hawkish language as a dovish shift. Economic growth has been weaker than expected, with consumer spending yet to rebound significantly. While robust Black Friday sales were noted, the National Australia Bank reported business conditions have reached their lowest since late 2020.

The 6M Euribor increased with 1 basis point to 2.65% compared to previous business day. The 10Y Swap increased with 1 basis point to 2.13% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.