US data cracking

U.S. Markets have kicked off the final week of November on a more muted note as concerns about the U.S. economy build

While softer economic data continues to bolster hopes that rate relief could be just around the corner, the moderate helping of weaker data also offers up a more fragile read of the economy, a dimmer than forecasted view on Q4 GDP, and a less buoyant U.S. consumer into the holiday season and beyond. 

Notably, new home sales fell more than expected last month. The near 18% YoY decline was the largest ever and notable, particularly in the context of the weaker-than-forecast sales pace. Not only could it dampen consumer sentiment, but it may also lead to tighter spending due to lower expected property gains.

However, the decline in interest rates is not sparking the typical positive response in the stock market. Investors may be harbouring concerns that the most significant impact of the Fed's assertive tightening is yet to unfold. Viewing the weakening U.S. data, investors perceive the gradual emergence of recessionary indicators on the horizon. Consequently, they are pivoting to recessionary hedges, transitioning from long positions in the U.S. dollar to gold as a safer investment.

As U.S. economic data reveals vulnerabilities amid a prolonged series of Federal Reserve rate hikes, Brent and WTI front-month contracts grapple with economic challenges in the lead-up to Thursday's OPEC+ meeting. Expectations for the energy consortium members to prolong their voluntary production cuts are contributing to the dynamics in the oil market.