Morning Macro 29th October
Happy FOMC day! The Federal Open Market Committee is set to lower the US federal funds rate target by 25 bps to 3.75% – 4%, focusing instead on any changes to the Fed’s post-meeting statement and comments from Chairman Jerome Powell. The FOMC’s statement is due to be released at 14:00 ET (18:00 GMT) with Chair Powell’s press conference scheduled for 2:30 ET. Currently, there is an 88.2% chance being priced in for a further 25 bps reduction at the 9-10 Dec meeting.
In other important news this week, US President Donald Trump and Chinese President Xi Jinping will meet in Busan, South Korea on 30 Oct. President Trump has hinted at a partial reduction in tariffs on China. Meanwhile, China has bought at least two cargoes of US soybeans, its first known purchase this season. Chicago soybean futures significantly climbed this week, crossing $11/bushel (a 15-month high) on trade optimism, but have eased since, reportedly on profit-taking and farmer hedging.
LME Copper also climbed above $11,000 amid the trade optimism.
In equities, technology stocks continue to drive global equities higher amid the trade optimism, with President Trump saying he will discuss Nvidia’s Blackwell AI processors (“it’s the super duper chip”) with President Xi Jinping. Nvidia’s share price soared above $200 on 28 Oct, and the company is set to open above the $5 trillion market value on Wednesday, becoming the first company to reach the milestone. The technology sector will also await earnings reports from Microsoft Corp., Alphabet Inc., Meta Platforms on 29 Oct and Apple Inc. and Amazon on 30 Oct.
The Reserve Bank of India has intensified its efforts to repatriate its gold reserves held abroad, buying back nearly 64 tonnes of gold in the first six months of the financial year (beginning in April), as per a report on foreign exchange reserves on 28 Oct. The RBI now holds more than 65% of its gold reserves at home, nearly double the share from four years ago,
Data releases today – US EIA oil inventories, Fed Interest Rate Decision
