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The consumer confidence index in the UK in September fell to the lowest in 6 months

The UK consumer confidence index in September 2024 fell to the lowest value in the last six months, amounting to -20 points, which is significantly lower than in July and June, when it was at the level of -13 points.

For comparison, in September 2023, the index was at -27 points (previously reported at -21 points). All five components of the indicator showed a decrease compared to July.

The subindex, reflecting consumers' assessment of their financial situation over the past year, fell to -9 points (in August it was -7), which is better than a year earlier, when it was -18 points. Personal finance expectations for the next 12 months also worsened, falling to -3 points from +6 in the previous month. A year earlier, this indicator was at the level of -6 points.

Consumers' assessment of the overall economic situation over the past year has dropped to -37 points compared to -35 a month earlier. The forecast for the next 12 months deteriorated even more: to -27 points from -15 in August.

The willingness of the British to spend money on large purchases also decreased, the subindex fell to -23 points from -13 points in August. In September last year, this indicator was at the level of -28 points.

The average index of consumer confidence for the period from 1981 to 2024 is -10.9 points. The record value of 10 points was recorded in June 1987, while at least (-49 points) was recorded in September 2022.
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Gold updated the record in anticipation of fresh signals from the Fed

Gold prices have reached a new historical high in Asian markets due to the optimistic sentiment caused by lower interest rates in the United States. Additional support for the market was provided by the expectations of speeches by representatives of the Federal Reserve System, which may shed light on the further steps of the regulator.

After the Fed lowered the rate by 50 basis points, gold has updated its records and continues to hold its positions confidently. The spot price of gold rose 0.3% to reach $2,631.19 per ounce, while futures rose 0.4% to $2,655.80 per ounce. The weakening of the dollar and the decline in Treasury bond yields also contributed to the strengthening of the metals market.

Experts expect further easing of the Fed's monetary policy, which may lead to a reduction in rates by an additional 125 basis points during the year. A number of key Fed officials, including Chairman Jerome Powell, are scheduled to speak in the coming days, which may provide additional signals for the markets.

Another important event will be the publication on Friday of a report on the PCE index, the main indicator of inflation for the Fed, which may affect further decisions by the regulator on rates. In addition, investors' attention is focused on the meetings of the central banks of Switzerland and Sweden, where interest rates are also expected to decrease.

Other precious metals, however, are showing a decline. Platinum futures fell 0.6% to $974.10 per ounce, while silver contracts fell 0.2% to $31.43 per ounce.
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The Central Bank of China reduces a number of rates as part of a large-scale economic stimulus program

The People's Bank of China has announced a package of measures to stimulate the economy. The head of the regulator, Pan Gongsheng, announced a reduction in the reserve requirement ratio (RRR) for large banks by 0.5 percentage points to 9.5%, which will release about 1 trillion yuan ($142 billion) of liquidity. There will be no changes for small and rural banks. It is expected that during the year the RRR may be reduced by another 0.25-0.5 percentage points.

The NBK also lowered the rate on seven-day reverse repo transactions from 1.7% to 1.5%, which will reduce the cost of borrowing under the medium-term lending program (MLF). For the first time in 10 years, the bank simultaneously lowered the RRR and the interest rate.

In addition, it is planned to reduce the base interest rate (LPR) by 0.2-0.25 percentage points, which will affect the cost of corporate, consumer and mortgage loans. Interest rates on mortgages already issued will be reduced by 50 bps, affecting borrowings worth about $5.3 trillion. The initial payment for the purchase of a second home has been reduced to a record low of 15%.

The NBK also plans to refinance mortgage loans and has increased guarantees on bank loans for unsold housing to 100%. Beijing is considering the creation of a stabilization fund for the stock market with support in the amount of at least 800 billion yuan. As part of the program, it is planned to exchange illiquid assets for government bonds and provide a 300 billion yuan re-loan for share repurchase.
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Oil may rise in price due to a drop in production in the United States

Analysts believe that after the recent decline in crude oil prices, the situation may soon change due to the expected slowdown in oil production in the United States.

For most of 2024, oil showed positive dynamics, but in recent months the yield has turned negative: the cost of Brent decreased by 3.5%, and WTI – by 0.4% year-on-year.

According to experts, fluctuations in oil prices are caused by both demand and supply factors. The global economy is slowing down, which is holding back demand, and market participants are concerned about a possible increase in oil production by the largest producers — OPEC+ and the United States. However, a number of experts believe that these expectations have already been taken into account in current prices, and in fact the situation may turn out to be different.

«Although oil demand was low in 2024, its decline is not accelerating, which is important against the background of rising global liquidity and lower interest rates,» Wells Fargo Bank said.

In addition, the bank assumes that with prices in the range of $60-70 per barrel, OPEC+ and the United States will reduce rather than increase production, which will help strengthen the market.

Special attention is paid to the statements of OPEC+ on the postponement of the increase in production scheduled for October 2024, as well as the fact that production growth in the United States may also slow down, as the cost of opening new wells reaches $ 64 per barrel. As a result, oil prices are projected to start rising again in the coming months.
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