Market Wrap: Clear rebound in Europe against falling oil price. Assets related to Brazil in retreat

🌐 Macroeconomics

• Awaiting the Fed decision: Financial markets hold their breath ahead of Wednesday's Federal Reserve meeting, where interest rates are expected to remain unchanged, although investors are positioning for clues regarding a potential December hike and analyzing incomplete US inflation data.
• Liquidity and debt market: US Treasury yields continue to decline despite the upcoming FOMC meeting, impacted by growing credit risk concerns in the AI infrastructure debt financing sector. US bond yields fell below 5%, while the SOFR rate rose to 3.92% from 3.90%.

🛢️ Commodities

• Brent Crude (-1.48%) and WTI Crude (-1.13%) — Commodity prices retreat (WTI testing the 100 USD/bbl mark) amid hopes for easing tensions with Iran and diplomatic talks in Tehran, despite reports of Houthi attacks on the key Saudi East-West pipeline.
• Gold (+0.52%) — The precious metal consolidates just above 4,020 USD/oz following last week's $1.35 billion sell-off by ETF funds, awaiting a catalyst from central banks.
• Copper (+0.40%) — The metal maintains relatively high valuations (5-year z-score at +2.44), while the agricultural sector records sharp declines — Sugar drops -3.06%, and Coffee falls by -2.45%.

💱 Currencies

• Japanese Yen (USDJPY) (-0.29%) — The dollar stabilizes around 157.3 JPY amid upcoming Fed and Bank of Japan decisions, as yen demand tries to capitalize on the pair's earlier downward momentum.
• Euro (EURUSD) (-0.11%) — The common currency exchange rate oscillates around 1.1200, where room for appreciation is capped by concerns over France's fiscal health and local social protests.
• Polish Zloty (USDPLN) (-0.33%) — The Polish zloty strengthens to 3.935 against the dollar, matching the general strength of CEE regional currencies, in contrast to the sharp sell-off of the Brazilian real following presidential elections.

📈 Stocks and Indices

• US Markets and Megacaps: S&P 500 (+0.08%) and NASDAQ 100 (+0.17%) start the week in moderately positive sentiment. Meta announced a massive $95 billion stock offering for AI infrastructure investments (potentially involving Nvidia, AMD, and Broadcom), while Anthropic plans a public S-1 filing ahead of an IPO.
• Neocloud bubble warning: Elon Musk warned the market that over 200 companies in the neocloud sector face a wave of bankruptcies amid leveraged debt, while SpaceX raised $40 billion in a debt deal with Apollo to finance GPUs.
• Strong session in Europe and WSE: European stock exchanges rise led by FTSE MIB (+1.24%) and DAX 40 (+1.11%). On the Polish market, WIG 20 gains +0.68% (5-year z-score reaches +2.61), supported by news of Celon Pharma's project qualification for FENG funding and Tauron's strategy update plans.
• Brazilian stock collapse: US-listed funds and shares of Brazilian companies came under heavy selling pressure following Lula da Silva's market-shocking election victory and reports of Jair Bolsonaro's lack of formal concession.

The vast majority of stocks advance during the European session. Source: XTB

Futures on the main Brazilian index open nearly 20% lower than on Friday, significantly lower than the levels from the first round of elections. Source: XTB

🪙 Cryptocurrencies

• Bitcoin (+0.03%) — The largest cryptocurrency struggles to hold the $80,000 level after weekend geopolitical concerns; institutional support continues from the Strive fund, purchasing another 6,182 BTC for $511 million.
• Institutional adoption and dispute in Israel: Aviva Investors launched a tokenized fund share class (£29 billion in value) on the XRP Ledger network, while the Bank of Israel openly criticized Prime Minister Netanyahu's plans regarding potential crypto usage to bypass sanctions.
• Zcash (+1.61%) — The token stands out with strong momentum, rising over 8.5% weekly (5-year z-score reaches +3.52), sharply contrasting with the broader altcoin market weakness.

🌍 Geopolitics

• US–Iran tensions: Donald Trump communicated that he will soon decide whether to reach a deal with Tehran or take decisive military action, while Saudi Arabia makes diplomatic efforts to ease regional conflict.
• Electoral shifts: Lula's victory in Brazil triggered a shockwave across local equity and FX markets, while in Serbia, thousands of demonstrators celebrate long-standing leader Aleksandar Vučić's defeat to the student movement.

Suggested for observation

• WTI Crude — balances on the psychological threshold of 100 USD/bbl (z-score: +1.61); highly sensitive to conflicting news from the Middle East (Houthi attacks vs. Iran negotiations).
• Gold — consolidation around 4,000 USD following a billion-dollar ETF outflow; a key instrument for positioning ahead of Wednesday's Federal Reserve decision.
• Copper — extremely high statistical valuation (5-year z-score at +2.44) alongside signs of a tech investment bubble burst in China creates room for heightened volatility.
• Zcash — extreme z-score (+3.52) and clear divergence against a weakening altcoin market require monitoring for a potential trend reversal.