Daily summary: rising expectations for another 50 bp rate cut puts pressure on the dollar 💲

The Tuesday session in Europe closed with gains: the German DAX gained 0.8%, the French CAC40 added 1.28%, the British FTSE 100 increased by 0.28%, and the Polish WIG20 was up by 2.22%.

On Wall Street, we are observing a moderate gains: the Nasdaq gained the most (+0.55%), the S&P500 added 0.16%, the Dow Jones rose by 0.09%, and the Russell 2000 gained 0.13%.

U.S. stock market seems not to be bothered with weaker consumer sentiment report. The Conference Board Consumer Confidence Index for August came in at 98.7 (forecast: 103.9; previous: 105.6).

Regional manufacturing activity indicators also fell short of expectations. The Richmond Index dropped from -19 to -21 (forecast: -13).

Optimism in the markets is fueled by announcements of further interest rate cuts in China. The People's Bank of China (PoBC) also announced support of $113 billion for the domestic stock market, filling Asian markets with euphoria.

CHN.cash contracts closed the session with an 8.55% gain, while HK.cash rose by 6.7%.

The dollar (USD) and yen (JPY) are among the weakest currencies in the G10 group fuelling the performance of equities. The USDIDX dollar index is down 0.40% today, consolidating near two-year lows. The Japanese yen is seeing similar declines, with the USDJPY pair gaining 0.05% to 143.6000.

The decline in the dollar is due to growing investor expectations for another 50 bp rate cut at the FOMC meeting on November 7th. Currently, markets are pricing in nearly a 58% chance of such a move, with the remaining 42% for a 25 bp cut.

The industrial commodities market is recording significant gains: copper is returning to its highest levels since mid-July (+2.94%), zinc is up by 4.5%, aluminum by 2.5%, and nickel by 1.64%.

Gold is gaining another 0.80% to reach $2,650. Meanwhile, an even stronger breakout is observed in silver, which is up 4.30% today to $32.

Cryptocurrencies are consolidating around their peaks after the weekend's rise. Today, we continued to observe a slight capital flow into smaller projects, particularly those related to the artificial intelligence sector. Bitcoin is up 0.20% to $63,500, and the capitalization of other projects excluding ETH and BTC is up 0.60% to $610 billion.