Just some hours earlier than the Saturday midnight deadline, Democrats and Republicans handed a quick time period invoice (45 days) to maintain the federal government funded into November and keep away from a shutdown which might have put the paychecks of some 3 million Individuals within the public sector and the army in danger. That is definitely not an optimum and confidence-inducing resolution in the long run: nevertheless, the markets are more and more accustomed to such occasions, which have occurred over 20 instances within the final 50 years, together with 4 within the final decade. It could be this, it could be the beginning of the brand new quarter, it could be the great knowledge from Asia, however this morning there’s a slight danger on, with the US and European indices up by a mean of +0.3% and oil additionally rising after two unhealthy periods that noticed it pulling again from earlier annual highs. The excellent news got here from Asia, the place manufacturing in China bounced again into the growth zone for the primary time since final April – as witnessed by the Caixin – and likewise in Japan, the Tankan Survey noticed optimism develop on this facet of the productive tissue. This morning we’re additionally seeing very totally different calls from 2 main US funding banks, with GS seeing demand for each oil and copper booming in China whereas CITI is taking the alternative view and sees weak point in industrial metals – with doable falls within the vary of 5-10% – and Crude falling to $70 in early 2024. Nevertheless, after September proved to be a very damaging month with falls of as much as 5.8% within the case of the Nasdaq, traders wish to begin off on the correct foot and rejoice the settlement reached in Washington concurrently they anticipate Federal Reserve Chairman Jerome Powell’s remarks later at this time.
UKOil – USOil unfold is narrowing
- FX – USDIndex simply shy of 106, +0.15% @ 105.97; AUDUSD is the laggard amongst majors -0.30% @ 0.6414, USDJPY is buying and selling at 149.65 after having hit a brand new 2023 excessive at 149.82. EURUSD flat, GBPUSD @ 1.22.
- Shares – US Futures are inching larger (US500 +0.40%, US100 +0.50%, US30 +0.39%%); EU futures are up as effectively (GER40 +0.35%, FRA40 +0.41%). September was a grim month: US30 -3.5%, US500 –4.9%, US100 -5.8%. Performances have been damaging for the entire Q3: -2.6%, -3.7%, -4.1% respectively.
- Commodities – USOil +0.64% at $91.32, UKOil is buying and selling at $92.65 and their unfold has narrowed to simply $1.33, within the decrease certain of this yr’s vary.
- GOLD – -0.19% @ $1845, XAGUSD provides one other -1.44% to its current extended drop, buying and selling at $21.88.
Right now: Highlights embrace Spanish, Italian, German, French, EZ, UK & US PMIs, US ISM Manufacturing, Fed’s Powell & Williams.
Attention-grabbing Mover: XAGUSD (-1.44% @ $21.88) had a wild session on Friday with a pointy reversal and an tour of 6.16%. The trendline that originated in August 2022 has been damaged, however there may be one other longer-term one presently passing by way of the $20.50 space, whereas $21.50 is a robust static help; the value is beneath its 50d and 200d MAs.
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Marco Turatti
Market Analyst
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