Goldilocks or gridlock?
SPY•Investors wagered that political gridlock in Washington could support markets as Brent crude fell below $100 a barrel, Treasury yields reached a two-month low and traders awaited the Bank of England’s policy decision.
1. Markets weigh political shifts
Investors are wagering that gridlock in Washington after Democrats’ sweep in the US midterm elections could be good for markets, while hopes rise of a possible end to the eight-month war in the Middle East. Brent crude fell to a two-month low below $100 a barrel.
2. Oil and rates retreat
Lower oil prices helped ease pressure on some Asian stock markets, including India, Malaysia and Hong Kong. South Korea’s KOSPI fell 4.8% and Taiwan stocks slid 2.6% as investors worried about spending on data centers. Treasury yields dropped to a two-month low, while the euro hovered near its highest level since early October.
3. BoE decision awaited
Sterling held near a seven-week high ahead of the Bank of England’s policy decision. The central bank was widely expected to raise rates for the first time in three years, following other major central banks responding to inflation pressures from the US-Iran war.
