Market Update – October 09 – “Long and Difficult war”

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<p><strong>Rising geopolitical tensions</strong> fueled a rise in risk aversion at the start of the week. Oil prices spiked amid escalating tensions in the Middle East and the Dollar picked up haven demand. The surprise Hamas attack on <strong>Israel boosted Gold</strong> and <strong>US currency</strong>. The <strong>USDIndex</strong> is trading at 106.12. <strong>USOil</strong> prices rose in early Asian trading on Monday amid concerns that <a title="" href="https://www.ft.com/content/8561ecb1-8c3f-4df0-92d3-4f935bcc6b06">Hamas’s attack on Israel</a> will increase tensions across the Middle East and affect output from leading producers. The <strong>White House</strong> confirmed deaths of ‘several’ US citizens in Hamas attacks.</p>
<p><span><strong>Germany: The industrial production corrected -0.2% m/m</strong> in August.</span> If oil prices rise further, the risks to growth will pick up, also because a fresh pick-up in inflation will weigh on consumer demand and complicate the situation for the ECB.</p>
<p><strong>Japan and Hong Kong</strong> were closed for holidays. In the US only equity markets are open today, with <strong>bond</strong> markets and <strong>Fed</strong> closed for<strong> Columbus Day</strong>.<strong> Chinese stocks declined</strong> on Monday morning, as markets returned from a week-long holiday that prompted <strong>disappointing levels of spending and travel.</strong></p>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/10/2023-10-09_09-40-18.jpg"><img decoding="async" class="aligncenter size-full wp-image-737123" src="https://forextraderhub.com/wp-content/uploads/2023/10/2023-10-09_09-40-18.jpg" alt="" srcset="/wp-content/uploads/2023/10/2023-10-09_09-40-18.jpg 1281w, /wp-content/uploads/2023/10/2023-10-09_09-40-18-300×56.jpg 300w, /wp-content/uploads/2023/10/2023-10-09_09-40-18-1024×189.jpg 1024w, /wp-content/uploads/2023/10/2023-10-09_09-40-18-768×142.jpg 768w, /wp-content/uploads/2023/10/2023-10-09_09-40-18-696×129.jpg 696w, /wp-content/uploads/2023/10/2023-10-09_09-40-18-1068×198.jpg 1068w" /></a></p>
<p><strong>US NFP:</strong> Nonfarm payrolls blew past estimates, surging 336k in September, with a net 119k upward revision to the prior two months. That put a November Fed rate hike back on the table and the markets responded as would be expected with Treasury rates surging, the USDIndex popping, and stocks sagging. But other parts of the report were more mixed which helped alleviate Fed fears while dip buyers, short covering, and technical buying ahead of the long weekend helped trim bond losses.</p>
<ul>
<li><strong>USDIndex</strong> edged up to <strong>106.13</strong> from <b>105.82 </b>while the <strong>Yen</strong> steadied at 149 lows. The <b>EURUSD </b>slide back to <strong>1.0540</strong> lows indicating a potential resumption of the long term downtrend while Cable settled at <strong>1.2190. T</strong>he Australian Dollar, seen as a proxy for risk appetite, slid to 0.6347, while the Kiwi edged lower to 0.5968.</li>
<li><strong>Stocks: </strong>The <strong>CSI300</strong> corrected -0.2% as mainland China markets returned from the Golden Week holiday. The <strong>ASX</strong> managed to nudge 0.2% higher. <strong>GER40</strong> and <strong>UK100</strong> are in the red, as are US futures.</li>
<li><strong>Oil: USOil</strong> and <strong>UKOil</strong> gapped up to 85.95 and 87.81 respectively a day after Israel’s PM, Benjamin Netanyahu, warned of a “long and difficult war”.</li>
<li><strong>Gold</strong> at <strong>$1855.50,</strong> as traders flocked to safer assets.</li>
</ul>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17.png"><img decoding="async" class="aligncenter size-full wp-image-737139" src="https://forextraderhub.com/wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17.png" alt="" srcset="/wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17.png 1640w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-300×169.png 300w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-1024×577.png 1024w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-768×433.png 768w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-1536×865.png 1536w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-696×392.png 696w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-1068×602.png 1068w, /wp-content/uploads/2023/10/TELEGRAM-MARKET-UPDATE-17-745×420.png 745w" /></a></p>
<p><strong>Interesting Mover: USOil </strong>and <b>UKOil </b>both retest 38.2% Fib. from September’s downleg, with USOil posting a death cross in the 4-hour chart.</p>
<p><strong>Click </strong><a href="https://www.hfm.com/en/trading-tools/economic-calendar.html"><strong>here</strong></a><strong> to access our Economic Calendar</strong></p>
<p><strong>Andria Pichidi<br />
</strong></p>
<p><strong>Market Analyst</strong></p>
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