Posted at 07 October 2022 / Categories Market Roundups
Market Roundup
• Oil prices add to inflation woes post-OPEC+ output cut
• U.S. weekly jobless claims increase more than expected
• Indexes fall: Dow down 1.15%, S&P 1.02%, Nasdaq 0.68%
• US Initial Jobless Claims 219K, 203K forecast, 193K previous
• US Jobless Claims 4-Week Avg 206.50K, 207.00K previous
• Continuing Jobless Claims 1,361K,1,345K,1,347K previous
•Canada Sep Ivey PMI 59.5, 60.9 previous
•Canada Sep Ivey PMI n.s.a 55.9,57.1 previous
•US Natural Gas Storage 129B,113B forecast, 103B previous
•US 4-Week Bill Auction 2.920% , 2.660% previous
•US 8-Week Bill Auction 3.230% ,2.990% previous
Looking Ahead – Economic Data (GMT)
•01:30 China Caixin Manufacturing PMI 49.5 previous
•01:30 China Manufacturing PMI 49.4 previous
•01:30 China Non-Manufacturing PMI 52.6 previous
•05:00 Japan Aug Leading Index (MoM) -1.4% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro edged lower against dollar on Thursday after the release of European Central Bank minutes from last month's meeting that showed policymakers were worried that inflation could get stuck at exceptionally high levels. The ECB raised rates by 75 basis points at the meeting - more than expected and signalled more as rapid inflation, once only evident in soaring energy prices, was now broadening out to affect everything from services to durable goods. Policymakers concluded that a recession was becoming "increasingly likely" but that risks were still skewed towards higher inflation outcomes than predicted. While inflation keeps rising, economic growth continues to slow and the 19-country currency bloc may already be in recession as a surge in energy costs is holding back consumption and discouraging investment. Immediate resistance can be seen at 0.9914(38.2%fib), an upside break can trigger rise towards 1.1000 (Psychological level).On the downside, immediate support is seen at 0.9773 (11DMA), a break below could take the pair towards 0.9698(23.6%fib).
GBP/USD: Sterling slipped on Thursday after a sharp drop the previous day, as investors waited for Friday's highly significant U.S. jobs data. The pound was 0.66% lower against the dollar at $1.1244, after dropping 1.4% on Wednesday. Gyrations in the dollar have caused choppy waters in global currency markets this week. Traders are grappling with whether the U.S. Federal Reserve will maintain its aggressive pace of interest rate hikes as it tries to curb inflation which has sent the dollar surging this year or whether concerns about slowing economic growth mean it will pivot and raise borrowing costs more slowly. Immediate resistance can be seen at 1.1389(38.2%fib), an upside break can trigger rise towards 1.1489 (Oct 5th high).On the downside, immediate support is seen at 1.1073 (11DMA), a break below could take the pair towards 1.1108 (23.6%fib).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Thursday as the greenback notched broad-based gains and despite a signal by Bank of Canada Governor Tiff Macklem that the central bank would continue to hike interest rates aggressively. Macklem said the currency’s recent weakness will offset some easing of inflation pressures that could come from improving global supply chains and lower commodity prices and made clear the central bank will not yet be pivoting away from its current rapid pace of interest rate increases. Money markets raised bets on a 50-basis-point hike at the BoC’s next policy announcement on Oct. 26. The loonie was down 0.9% at 1.3740 to the greenback, moving back in sight of last Friday’s two-year low at 1.3838. Immediate resistance can be seen at 1.3823(23.6%fib), an upside break can trigger rise towards 1.3936(Higher BB).On the downside, immediate support is seen at 1.3677(38.2%fib), a break below could take the pair towards 1.3559 (50%fib).
USD/JPY: The dollar strengthened against the Japanese yen on Thursday as investors bet on another strong U.S. non-farm payrolls report that should keep the Federal Reserve on an aggressive tightening path for some time. U.S. non-farm payrolls for September are due to be released on Friday, with economists forecasting a headline print of 250,000 new jobs, compared with 315,000 in August. Chicago Fed President Charles Evans on Thursday said the Fed's policy rate is likely headed to 4.5%-4.75% by the spring of 2023 as the Fed increases borrowing costs to bring down too-high inflation. The dollar rose 0.3% to 145.05 against yen. It hit a session high of 145.135, not far from a 24-year peak of 145.90 yen touched on Sept. 22. Strong resistance can be seen at 145.17 (23.6% fib), an upside break can trigger rise towards 145.66 (Higher BB).On the downside, immediate support is seen at 144.68 (5DMA ), a break below could take the pair towards 143.52 (38.2% fib).
Equities Recap
European markets failed to hold early gains and ended weak on Thursday as worries about slowing growth and rising inflation weighed on sentiment.
The UK's benchmark FTSE 100 closed down by 0.78percent, Germany's Dax ended up by 0.37 percent, and France’s CAC finished the down by 0.82 percent.
Wall Street's major indexes closed lower on Thursday as concerns mounted ahead of closely watched monthly nonfarm payrolls numbers due on Friday that the Federal Reserve's aggressive interest rate stance will lead to a recession..
Dow Jones closed down by 1.15 percent, S&P 500 closed down 1.02 percent, Nasdaq ended down by 0.68 percent.
Treasuries Recap
U.S benchmark Treasury yields whose recent gains had helped drive the greenback higher, were up about 6 basis points at 3.8175%.
Commodities Recap
Gold prices dipped on Thursday, pressured by strength in the dollar and Treasury yields, while investors prepared for U.S. jobs data that could influence the Federal Reserve’s monetary policy trajectory.
Spot gold fell 0.2% to $1,712.19 per ounce by 1358 EDT (1758 GMT). U.S. gold futures settled flat at $1,720.8.
Oil prices rose about 1% on Thursday, holding at three-week highs after OPEC+ agreed to tighten global supply with a deal to cut production targets by 2 million barrels per day (bpd), the producers' largest reduction since 2020.
Brent crude futures settled at $94.42 a barrel, up $1.05, or 1.1%. U.S. West Texas Intermediate (WTI) crude futures settled at $88.45 a barrel, gaining 69 cents, or 0.8% after closing 1.4% up on Wednesday.