Global markets are reeling after China’s National People’s Congress (NPC) press conference left investors underwhelmed, with European stocks sliding into the red and U.S. futures showing little movement. Here’s a detailed look at how different markets are reacting, from currency movements to commodity trends and economic events on the horizon.

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1. European Markets Under Pressure

European stock markets have taken a hit, with major indices across the continent firmly in the red. Investor sentiment soured after the NPC press conference in China failed to offer any substantial new stimulus measures, dashing hopes for a boost to global growth from one of the world’s largest economies. This pessimistic outlook has led to widespread declines in European stocks, and market participants remain cautious as they await further developments.

2. Currency Movements: Stronger Dollar, Yen Gains Ground

In currency markets, the U.S. Dollar Index (DXY) is showing modest strength, while the Japanese Yen is also gaining, outperforming other major currencies. Conversely, the Australian and New Zealand dollars – often dubbed the Antipodeans – are lagging behind, largely due to their economies’ ties to China and the lack of fresh policy stimulus from Beijing. This currency trend reflects a broader shift in investor sentiment towards safe-haven assets as market participants process the NPC’s implications for global growth.

3. Bond Markets: Stability with Focus on Central Bank Commentary

Bonds are relatively firm, providing a sense of stability amid the broader risk-off sentiment. UK Gilts are showing slight outperformance, while U.S. Treasuries remain stable as the market anticipates remarks from Federal Reserve officials Michelle Bowman and Adrian Musalem later in the day. These comments will likely provide insights into the Fed’s stance on inflation and future interest rate moves, factors that could influence bond yields and investor sentiment.

4. Commodities: Oil, Gold, and Metals Retreat

Commodities have also been affected by the lack of market-moving announcements from China. Crude oil prices have slipped, alongside gold (XAU) and base metals, as investors recalibrate their expectations for Chinese demand. The absence of new economic stimulus measures from China – a major consumer of commodities – has sparked concerns about a potential slowdown in demand, putting pressure on prices across these asset classes.

5. Key Events Ahead: Canadian Jobs, U.S. Inflation Data, and More

Looking forward, markets are eyeing several key economic events and reports. In Canada, jobs data is set for release, which could impact the Canadian dollar and inform the Bank of Canada’s outlook. In the U.S., the University of Michigan’s preliminary inflation expectations and consumer sentiment report will provide insights into American consumers’ outlook on inflation, a critical factor in the Federal Reserve’s decision-making.

Additionally, speeches from Bank of Canada’s Deputy Governor Gravelle and Fed officials Bowman and Musalem are anticipated, as investors seek further guidance on monetary policy from these key central bank figures.

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The global markets are dealing with the aftereffects of a subdued response from China’s NPC, leaving investors with more questions than answers about the near-term economic outlook. As European stocks falter, bonds remain firm, and commodities lose ground, markets are now turning their attention to upcoming economic data and central bank insights that could shape the path forward. Investors are bracing for what’s next, with a particular focus on inflation, employment data, and policy signals from major central banks.