The "fear index" rose to its highest level since March

American indices recorded another declining session on Friday. VIX fear index thus rose to the highest level since March (21,7 points), when the market was experiencing a crisis in regional banks in the USA. US debt yields decreased and the dollar remained stable.

After reaching the level close to USD 2000, gold fell and is currently there at USD 1980 per ounce Trojan. Prices also underwent a downward correction oil. WTI fell to USD 87 per barrel. The situation in the Middle East is still the number one topic for financial markets.

There will be no ceasefire

The situation in the Middle East is still tense. The United States gave a wound to Israel to make it delayed its ground offensive in the Gaza Strip, which would be directed at Hamas. In turn, CNN quotes an Israeli official who declares that the world should not expect a ceasefire. The number of victims is constantly rising. Humanitarian aid is directed to Palestine. According to data, over 4 people have already died. people, many of them children.

It's quarterly earnings season on Wall Street. According to data collected by Blommberg, of the 86 companies from the SP500 index that announced reports by Friday morning, as many as 74 percent of them turned out to be better than estimates. This week the data will include, among others: A, Meta Platforms, Microsoft, Amazon, Visa and General Motors.

Based on macro data and economic events, investors' attention should be focused on the decision of the European Central Bank. That's on Thursday, of course. On the same day we will see the US GDP result for the third quarter and a day later a report on Americans' spending, which contains the Fed's preferred measure of inflation. Estimates indicate that the US economy has accelerated rather than slowed down. The situation is unique because a year ago, forecasts indicated a recession in the US by then due to aggressive increases in interest rates by the Federal Reserve. If we receive a strong PCE inflation report, it will strengthen expectations that the central bank will have to do more to quell price pressures.

The fight against inflation is still ongoing

The ECB will probably not increase the cost of money in the euro zone. The inflation rate dropped significantly in September, which was in line with the bank's expectations. After the last increase, the deposit rate is 4%. and refinancing 4,5%. and this is probably the peak of the entire tightening cycle. Representatives, of course EBC in their statements they do not completely rule out further steps upwards. If they thought otherwise, it would be risky with so many unknowns and so many risks. It must be admitted that the fight against inflation is not yet won. However, the vast majority of members of the Council believe that another increase is no longer required when inflation remains within the limits of the institution's last projection.

Another argument against an increase at the upcoming ECB meeting is the fact that a member of the Governing Council, Peter Kazimir, has recently admitted the particular importance of the upcoming projections in December and March. This suggests that in the future, as happened before, the ECB will again will prefer to make important decisions on meeting dates, where they are presented, and the bank's latest forecasts will be presented only in December.

Source: OANDA TMS Brokers