Gold Surges Above $3700/oz, China Keep Rates on Hold and FTSE Holds at Support

European stocks remained stable on Monday, with gains in technology companies being offset by losses in the automotive sector. This was a day of waiting for investors, who were looking ahead to comments from several Federal Reserve officials.

The pan-European STOXX 600 index was largely unchanged, though Spanish stocks performed particularly poorly, dropping by 0.9%.

In company news, German luxury carmaker Porsche saw its shares fall by 4.7% after it lowered its profit forecast for 2025. This decision was made because the company is slowing down its plans for rolling out electric vehicles due to weaker demand. Its parent company, Volkswagen, also cut its 2025 profit outlook and saw its stock slide by 4.5%.

On the positive side, technology stocks rose by 0.9%, with chip manufacturers ASML and ASMI gaining 2.9% and 1.9%, respectively.

In other company news, shares of the Dutch geo-data company Fugro plunged by 11.9% after the company withdrew its annual financial forecast, citing “significant changes” in market conditions in recent weeks.

On the FX front, The Japanese yen’s recent gains against the US dollar were largely erased, with the yen falling by 0.2%. This retreat comes after a “hawkish” shift in the Bank of Japan’s tone last week, which suggested that an interest rate hike might be coming soon.

Meanwhile, the British pound dropped to its lowest value in two weeks, reaching $1.3453. It was under pressure from a combination of domestic problems, including a recent sharp increase in UK government borrowing and a Bank of England decision that highlighted the difficulty for policymakers in balancing economic growth with controlling inflation.

The euro also weakened slightly, falling by 0.15% to $1.1731.

In other currency news, the Australian dollar saw a small increase of 0.07% to $0.6595, getting some support from positive economic comments made by a senior central banker. The New Zealand dollar also edged up by 0.03% to $0.5858.

Finally, the Chinese yuan firmed slightly to 7.1136 per dollar. This was helped by a reduction in trade tensions between the US and China, as well as China’s decision to keep its key lending rates unchanged.

Currency Power Balance