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OECD Forecast Boosts Market Sentiment; FOMC Minutes in Focus Today

OECD Forecast Boosts Market Sentiment; FOMC Minutes in Focus Today

According to the OECD, China will grow slightly above 4%, the US will slow to 0.5% GDP growth, and Europe, despite being the most affected by the conflict in Ukraine, is expected to avoid th

Stock markets timidly resumed their upward path after yesterday's break.

Concerns about the effects of China's anti-Coronavirus measures on the global economy were put aside yesterday.

The growth forecasts for the global economy published yesterday by the OECD contributed to this better mood. The international body does not foresee a recession either globally or in most major countries. The forecast is that China will grow slightly above 4%, the United States will slow down to 0.5% GDP growth, and Europe, even though it is the most affected by the confrontation in Ukraine, is also expected to avoid the worst scenario. Although, in this case, a technical recession cannot be ruled out. Inflation will slowly decline, according to the OECD, although still at high levels.

For this reason, it advises central banks to continue tightening monetary policy, which is more likely to be implemented by the European Central Bank and the Federal Reserve, the latter to a lesser extent because it has already traveled much of the way.

The market is still focused on determining the Fed's terminal interest rate. In this regard, today's publication of the minutes of the previous meeting will be significant. With these minutes we will be able to have more information about the inclination of the voting members of the Monetary Policy Committee. Markets will react positively if the bias is toward less aggressiveness and fewer high-rate hikes.

Meanwhile, on a day like today, when activity will begin to fall slightly, and participation will drop significantly due to the eve of Thanksgiving, the market is slowly moving forward, with the Dow Jones 30 very close to the important level of resistance of 34,200, which if overcome would definitively end the bear market and open the way to higher levels such as 35,300.

The dollar moves accordingly, weakening slightly, driven down by the fall in yields on US Treasury bonds, with the 10-year again below 3.80%.

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Sources: Bloomberg, Reuters

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