An active overnight session saw China’s banks lowering their one-year loan prime rate to 3.10% from 3.35% and reducing their five-year gauge to 3.60% from 3.85%. Gold touched a record high of $2,732.82 per ounce as Middle East tensions continue.
Looking ahead, Wednesday appears to be the busiest day data-wise. Tesla reports after hours, becoming the first of the Magnificent Seven tech companies to release earnings as the corporate season kicks in. The Fed will also publish its Beige Book, a readout on economic conditions in the central bank’s 12 districts. Today, Global Central Bank heads and Finance Ministers gather in Washington for the annual meeting of the International Monetary Fund and World Bank to discuss how countries can navigate low growth and high debt. Last week, the IMF warned that global public debt is forecast to exceed $100tn by the end of this year, driven primarily by the U.S. and China. Meanwhile, Russian President Vladimir Putin is hosting a summit of BRICS leaders starting Tuesday, as the Kremlin seeks support in its standoff with the West. Leaders from Brazil, India, China, South Africa, Egypt, the UAE, and Saudi Arabia are expected, representing a third of global economic output.
Market-wise, oil prices look set to remain under pressure after dropping around 7% last week. U.S. President Joe Biden mentioned on Friday that there is an opportunity to deal with Israel and Iran in a way that could potentially end their conflict in the Middle East for a time, though the gold price doesn’t reflect this sentiment. Bitcoin rose 0.4% to $69,064.57, Ether rose 1% to $2,738.18, the yield on 10-year Treasuries was little changed at 4.08%, Cable opens at 1.3030, and EURUSD is below the 200-day moving average at 1.0875.
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