Market Update – October 2 – Shutdown postponed as Q4 kicks off
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<p>Just a few hours before the Saturday midnight deadline, Democrats and Republicans passed a <strong>short term bill (45 days) to keep the government funded into November and avoid a shutdown</strong> which would have put the paychecks of some 3 million Americans in the public sector and the military at risk. This is certainly not an optimal and confidence-inducing solution in the long term: however, the markets are increasingly accustomed to such events, which <span>have occurred over 20 times in the last 50 years</span>, including 4 in the last decade. It may be this, it may be the start of the new quarter, it may be the good data from Asia, but <strong>this morning there is a slight risk on</strong>, with the US and European indices up by an average of <span>+0.3%</span> and oil also rising after two bad sessions that saw it pulling back from previous annual highs. The good news came from Asia, where <strong>manufacturing in China bounced back</strong> into the expansion zone for the first time since last April – as witnessed by the <strong>Caixin</strong> – and also in <strong>Japan, the Tankan Survey</strong> saw optimism grow in this side of the productive tissue. This morning we are also seeing <strong>very different calls from 2 major US investment banks</strong>, with <strong>GS</strong> seeing demand for both<strong> <span>oil and copper</span></strong> booming in China while <strong>CITI</strong> is taking the opposite view and sees weakness in<span><strong> industrial metals</strong></span> – with possible falls in the range of 5-10% – and Crude falling to <strong><span>$70</span></strong> in early 2024. However, after September proved to be a particularly negative month with falls of up to 5.8% in the case of the Nasdaq, investors want to start off on the right foot and celebrate the agreement reached in Washington at the same time as they anticipate Federal Reserve Chairman Jerome Powell’s remarks later today.</p>
<h6>UKOil – USOil spread is narrowing<br />
<a href="https://forextraderhub.com/wp-content/uploads/2023/10/brent-crude.jpg"><img decoding="async" class="alignnone size-full wp-image-735034" src="https://forextraderhub.com/wp-content/uploads/2023/10/brent-crude.jpg" alt="" srcset="/wp-content/uploads/2023/10/brent-crude.jpg 1200w, /wp-content/uploads/2023/10/brent-crude-300×156.jpg 300w, /wp-content/uploads/2023/10/brent-crude-1024×533.jpg 1024w, /wp-content/uploads/2023/10/brent-crude-768×400.jpg 768w, /wp-content/uploads/2023/10/brent-crude-696×363.jpg 696w, /wp-content/uploads/2023/10/brent-crude-1068×556.jpg 1068w, /wp-content/uploads/2023/10/brent-crude-806×420.jpg 806w" /></a></h6>
<ul>
<li><strong>FX</strong> – <strong>USDIndex</strong> just shy of 106, <span>+0.15%</span> @ <span>105.97</span>; <strong>AUDUSD</strong> is the laggard among majors -0.30% @ 0.6414, <strong>USDJPY</strong> is trading at <strong><span>149.65</span></strong> after having hit a new 2023 high at 149.82. <strong>EURUSD</strong> flat, <strong>GBPUSD</strong> @ 1.22.</li>
<li><strong>Stocks</strong> – US Futures are inching higher (<strong>US500</strong> +0.40%, <strong>US100</strong> +0.50%, <strong>US30</strong> +0.39%%); EU futures are up as well (<strong>GER40</strong> +0.35%, <strong>FRA40</strong> +0.41%). <strong>September was a grim month</strong>: US30 <strong><span>-3.5%</span></strong>, US500 –<strong><span>4.9%</span></strong>, US100 <strong><span>-5.8%</span></strong>. Performances were negative for the whole Q3: -2.6%, -3.7%, -4.1% respectively.</li>
<li><strong>Commodities</strong> – <strong>USOil</strong> +0.64% at $91.32, <strong>UKOil</strong> is trading at $92.65 and their spread has narrowed to just $1.33, in the lower bound of this year’s range.</li>
<li><strong>GOLD</strong> – -0.19% @ <span>$1845</span>, <strong>XAGUSD</strong> adds another <strong><span>-1.44%</span></strong> to its recent prolonged drop, trading at <span>$21.88</span>.</li>
</ul>
<p><strong>Today</strong>: Highlights include Spanish, Italian, German, French, EZ, UK & US PMIs, US ISM Manufacturing, Fed’s Powell & Williams.</p>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/10/xag.jpg"><img decoding="async" class="alignnone size-full wp-image-735019" src="https://forextraderhub.com/wp-content/uploads/2023/10/xag.jpg" alt="" srcset="/wp-content/uploads/2023/10/xag.jpg 1200w, /wp-content/uploads/2023/10/xag-300×156.jpg 300w, /wp-content/uploads/2023/10/xag-1024×533.jpg 1024w, /wp-content/uploads/2023/10/xag-768×400.jpg 768w, /wp-content/uploads/2023/10/xag-696×363.jpg 696w, /wp-content/uploads/2023/10/xag-1068×556.jpg 1068w, /wp-content/uploads/2023/10/xag-806×420.jpg 806w" /></a></p>
<p><strong>Interesting Mover: XAGUSD (-1.44% @ $21.88)</strong> had a <span>wild session on Friday</span> with a sharp reversal and an <span>excursion of 6.16%</span>. The <strong>trendline that originated in August 2022 has been broken</strong>, but there is another longer-term one currently passing through the $20.50 area, while $21.50 is a strong static support; the price is below its 50d and 200d MAs.</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>Marco Turatti<br />
</strong></p>
<p><strong>Market Analyst</strong></p>
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