While others tightened, China continued to maintain its relaxed policy. China's economic woes deepened as its central bank held benchmark lending rates at record lows. While injecting record liquidity, the PBOC opted for stability, disappointing analysts who advocated deeper cuts. Inflationary pressures and banking sector concerns likely hindered bolder action, forcing hopes for significant stimulus into 2024. This leaves China to navigate its fragile recovery with limited monetary firepower, relying on targeted fiscal measures and a potential property market rebound to reignite the economy, although unlikely in the short term.

EQUITY

Wall Street cheered again on Tuesday, with the S&P 500 closing within a whisker of its record high. Broad-based buying fueled the rally, with small-caps leading the charge, as investors shrugged off a weak outlook from FedEx and eyed upcoming inflation data for further direction. The underlying sentiment remains bullish on a robust housing market and expectations of easing monetary policy.

GOLD

The bullion price treads water above $2,000 on a weaker dollar. While lower interest rate expectations hold, investors await Friday's core PCE data to gauge inflation's grip and solidify the central bank's course. Price action suggests short-term consolidation before continuing to make new highs.

OIL

Oil prices hovered above $79 per barrel on Wednesday, anxious by ongoing Red Sea tensions after Houthi attacks on ships. The US launched a task force to protect trade while simultaneously replenishing its strategic oil reserves. However, surging US oil production, expected to reach record highs alongside Canada and Brazil, could dampen price hikes in 2024.

CURRENCY

The dollar dipped as traders gambled on a January Fed rate cut, despite recent pushback from officials. Meanwhile, the Japanese yen remained pinned after the Bank of Japan offered no clues of a policy shift, while China's yuan inched lower as markets pondered its easing bias given global tightening. The week's core PCE data could seal the dollar's fate, potentially confirming the "everything rally" if it confirms the dovish narrative.