The moves reflect investor jitters ahead of the Fed’s Wednesday meeting. While the central bank is broadly expected to deliver a 25 basis point interest rate cut, some traders warned it could signal a slower pace of easing ahead.
“The expected Fed rate cut this week is expected to come with a hawkish tone and a potentially extended pause next year,” said John Canavan, lead analyst at Oxford Economics.
A US$58 billion sale of three-year notes arrived at a lower than forecast yield Monday, a sign of better than anticipated demand. A US$39 billion auction of 10-years and US$22 billion of 30-years are set for Tuesday and Thursday, respectively.
Gold, silver, copper and oil all fell Monday. Crude prices tumbled around 2% during the session, with Russian exports to India in focus.
See also: Asian stocks set to climb after US CPI lifts mood
In Asia, data due for release includes business confidence and an interest rate decision in Australia, consumer confidence in Indonesia and machine tool orders in Japan. Bank of Japan governor Kazuo Ueda is set to speak at an event in London later Tuesday.
The yen fell Monday after a magnitude-7.6 quake struck off Japan’s northeast coast. Earlier, Japanese bond yields rose across the curve after data showed that the economy shrank in the three months through September, giving some justification for Prime Minister Sanae Takaichi’s stimulus package announced last month. The figures add an element of complexity to the Bank of Japan’s policy decision next week, but likely won’t derail it from its gradual hiking path.
In China, Beijing’s top leaders made strengthening domestic demand their top economic priority for 2026, while hinting at a measured approach to stimulus.
See also: BofA says anything-but-dollar trade to lift international assets
Warner Bros battle
Elsewhere, President Donald Trump granted Nvidia Corp permission to ship its H200 artificial intelligence (AI) chip to China in exchange for a 25% cut of the sales. Paramount Skydance Corp launched a hostile takeover bid for Warner Bros. Discovery Inc, against the backdrop of anti-trust concerns related to Netflix Inc’s deal.
Kevin Hassett, a top candidate to take over the role of Fed chair, said it would be irresponsible for the Fed to lay out a plan for where it aims to take interest rates over the next six months. The White House National Economic Council Director emphasised the importance of following the economic data in a CNBC interview Monday.
Unease that inflation remains too high has also caused divisions among Fed officials, in a rift that’s been exacerbated by the lack of fresh data during the shutdown. After this week’s likely cut, money markets are leaning towards two more moves by the end of 2026, down from three signalled barely a week ago.
Uploaded by Isabelle Francis
