By Ologeh Joseph Chibu
Global stock markets rallied Monday as investors brace for a pivotal week marked by the U.S. presidential election, an upcoming Federal Reserve interest rate decision, and anticipated economic stimulus from China.
Oil prices climbed approximately 2.5% after OPEC+ members announced Sunday that they would extend supply cuts until the end of next month, citing weaker demand from major markets, including China and the U.S.
Following a positive close on Wall Street, major European and Asian markets posted gains. “Traders are gearing up for perhaps the most important week of the year,” noted Joshua Mahony, chief market analyst at Scope Markets.
The dollar softened against major currencies after a new opinion poll in Iowa showed a slight lead for Democratic Vice President Kamala Harris over her Republican opponent, Donald Trump. Market watchers suggest a Trump win could boost the dollar and Treasury yields, given his tax cut pledges and proposed tariffs on imports.
Additionally, attention is on Senate and House elections, with Republicans potentially gaining control of both. A Republican sweep could trigger significant fiscal policy shifts, a potential risk for bondholders as yields might rise, according to Peter Esho, founder of Esho Capital.
The Federal Reserve is also expected to announce a 25-basis-point rate cut this week, following a previous 50-point reduction, in a move widely anticipated by investors.
Meanwhile, in China, Beijing is considering an economic stimulus package, with economists anticipating one trillion yuan ($140 billion) in additional funding, mostly aimed at aiding indebted local governments and banks. Nomura’s chief China economist, Ting Lu, noted that the U.S. election results could impact the scale of China’s stimulus measures, as both candidates have pledged to adopt tougher stances toward Beijing.
In the eurozone, Paris and Frankfurt were higher, while London gained 0.6%, with the Bank of England expected to cut its main interest rate later this week following a dip in inflation.
Oil prices received further support after Iran’s Supreme Leader Ayatollah Ali Khamenei warned of repercussions for recent Israeli and U.S. actions, heightening geopolitical tensions in the region.
Key Market Figures (as of 1100 GMT):
London – FTSE 100: +0.6% at 8,229.52 points
Paris – CAC 40: +0.4% at 7,434.89 points
Frankfurt – DAX: +0.1% at 19,271.49 points
Hong Kong – Hang Seng Index: +0.3% at 20,567.52 (close)
Shanghai Composite: +1.2% at 3,310.21 (close)
New York – Dow: +0.7% at 42,052.19 (close)
Currency and Oil Highlights:
Euro/Dollar: $1.0902, up from $1.0833 on Friday
Pound/Dollar: $1.2964, up from $1.2917
Dollar/Yen: 151.82 yen, down from 153.01 yen
Brent Crude: +2.3% at $74.80 per barrel
West Texas Intermediate: +2.5% at $71.20 per barrel
Source: AFP