ATFX Global Market Outlook - Q3 2024

Global Market Outlook Q3 2024

Introduction

In Q2 2024, global financial markets were heavily influenced by the monetary policies of major central banks, particularly regarding interest rate cuts in Europe and the US. Despite maintaining high interest rates, the Bank of Japan shifted its long-standing negative interest rate policy but faced significant yen depreciation, necessitating market intervention. Geopolitical risks in the Middle East and economic instability heightened demand for safe-haven assets, driving gold and silver prices to record highs. AI advancements and expectations of rate cuts spurred robust performances in European and American stock markets, with major US indices reaching new peaks.

US Stock Indices

The outlook for US stock indices hinges on potential Federal Reserve interest rate cuts. Despite expectations of cuts in June, the US economy's resilience kept inflation above the Fed's 2% target, leading to divergent views on rate reductions. Analysts predict a 50% chance of a 25-basis-point cut by September or November. AI technology and corporate profit growth bolstered the stock market, with tech companies leading gains. The presidential election in November may also influence long-term market trends, historically showing weak returns during election years.

European Stock Indices

European stock markets faced challenges from persistent inflation and economic strength disparity compared to the US. Despite this, hopes for rapid inflation decline and stock market rebound remain, contingent on central bank policies and geopolitical stability.

Key Currencies

- GBPUSD & EURUSD: GBPUSD is expected to move sideways up, driven by slower US economic growth, while the EUR faces economic weakening.

- USDCAD: Volatility persists as the Bank of Canada cuts rates.

- USDJPY & USDCNH: Yen depreciation is likely due to weak Japanese economic data; offshore CNY may oscillate with Fed rate cuts.

- USDMXN: Potential fall of the Mexican peso.

Gold, Silver, and Oil

Gold and silver prices surged in Q2 due to geopolitical tensions and economic slowdown fears. However, oil prices retreated compared to Q1, reflecting global economic concerns.

Cryptocurrencies

The sustainability of cryptocurrency growth beyond the current peak remains under scrutiny, with market performance closely watched.

Outlook and Strategy

Investors should monitor central bank actions, geopolitical risks, and trade tensions. Effective strategies will involve adjusting portfolios to manage risks and capitalize on market fluctuations. Despite uncertainties, potential investment opportunities arise from the evolving economic landscape.

Conclusion

Q3 2024 presents a volatile yet opportunity-laden environment for investors. Vigilant monitoring of economic indicators and strategic adjustments will be crucial for navigating the market's complexities and leveraging growth potential.

For reference

Source: ATFX Website

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