Market Update – October 3 – Risk off bites across asset classes
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<p>Starting with APAC, the <strong>RBA has just unsurprisingly kept rates steady</strong> in Governor Bullock’s inaugural meeting with the statement largely a carbon copy from the Lowe era (”inflation is coming down, the labour market remains strong and the economy is operating at a high level of capacity utilisation”): AUD continues to decline this month and is -0.76% against the USD right now, followed by the KIWI which marks -0.63%. The <strong>JPY</strong>, which is one step away from 150, i<strong>s surprisingly strong this morning</strong>, flat against the USD, as the <strong>rhetoric about the possibility of intervention continues</strong>, this morning from Japan’s Finance Minister Suzuki. The JPN225, for its part, is down -1.85% and back to last June’s levels, but the whole of APAC is suffering: Hong Kong and China are back to trading and the former is down -3.04%, weighed down by developers and the energy sector. Moreover, the <strong>IMF has lowered growth expectations for the area</strong>.</p>
<h6><a href="https://forextraderhub.com/wp-content/uploads/2023/10/curve.jpg">US Yield Curve<img decoding="async" class="alignnone size-full wp-image-735373" src="https://forextraderhub.com/wp-content/uploads/2023/10/curve.jpg" alt="" srcset="/wp-content/uploads/2023/10/curve.jpg 1200w, /wp-content/uploads/2023/10/curve-300×156.jpg 300w, /wp-content/uploads/2023/10/curve-1024×533.jpg 1024w, /wp-content/uploads/2023/10/curve-768×400.jpg 768w, /wp-content/uploads/2023/10/curve-696×363.jpg 696w, /wp-content/uploads/2023/10/curve-1068×556.jpg 1068w, /wp-content/uploads/2023/10/curve-806×420.jpg 806w" /></a></h6>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/10/treassu.jpg"><img decoding="async" class="alignnone size-full wp-image-735358" src="https://forextraderhub.com/wp-content/uploads/2023/10/treassu.jpg" alt="" srcset="/wp-content/uploads/2023/10/treassu.jpg 1200w, /wp-content/uploads/2023/10/treassu-300×156.jpg 300w, /wp-content/uploads/2023/10/treassu-1024×533.jpg 1024w, /wp-content/uploads/2023/10/treassu-768×400.jpg 768w, /wp-content/uploads/2023/10/treassu-696×363.jpg 696w, /wp-content/uploads/2023/10/treassu-1068×556.jpg 1068w, /wp-content/uploads/2023/10/treassu-806×420.jpg 806w" /></a></p>
<p>More broadly, we are seeing a <strong>series of risk-off movements</strong>, evident in the <strong>strength of the USD</strong> which, after +0.75% yesterday, is now within touching distance of 107. Yesterday afternoon’s decent <strong>US ISM data</strong> helped <strong>long end yields continue to rise</strong> (10-Year at 4.691%) while continued <strong>weakness in Eurozone manufacturing</strong> sank the EURUSD below 1.05. European stock markets suffered more than American ones, which showed more indecision and ended the day mixed. But while the mega-cap filled Nasdaq finished at +0.83%, the <strong>RUSSELL 2000 index of small to mid-cap companies is now negative YTD</strong>. Finally, the weakness in precious metals was significant, with <strong>Silver plummeting <span>-5.81%</span></strong> below $21; energy also sold off, with OIL down for four consecutive sessions and UKOIL down 8% from last Thursday’s high.</p>
<ul>
<li><strong>FX – USDIndex</strong> <span>+0.24% @ 106.86</span> after <strong><span>+0.75%</span></strong> yesterday; <strong>AUDUSD</strong> <span>-0.73%</span> @ 0.6316, <strong>NZDUSD</strong> <span>-0.56%</span>. <strong>YEN</strong> strengthens 0.03%, <span>149.82</span>, <strong>USDCNH</strong> steady at 7.32. <strong>EURUSD</strong> -0.08% @ <span>1.0469</span> and <strong>CABLE</strong> at <strong>1.20 handle</strong> after yesterday’s heavy session.</li>
<li><strong>Stocks – US Futures</strong> fractionally negative (US500 -0.12%, US100 -0.17%, US30 -0.11%). <strong>RUSSELL 200 turned negative YTD</strong>. EU futures -0.2% on average after both GER40 and FRFA40 lost -0.9% yesterday. <strong>APAC heavy</strong>: HK <span><strong>-3%</strong></span>, CHINA50 -1.53%, <strong>JPN225</strong> <span>-1.90%</span>.</li>
<li><strong>Commodities – USOil</strong> <span>-0.28%</span> at $88.35, <strong>UKOil</strong> <span>-0.44%</span>, Wheat -0.13%, Corn -0.61%.</li>
<li><strong>Metals – Gold</strong> -0.27% @ $<span>1822</span>, <strong><span>XAGUSD </span></strong>@ <strong><span>21.03</span></strong>, <strong>Copper</strong> <span>-1.03%</span>, Palladium -0.35%.</li>
</ul>
<p><strong>Today</strong>: highlights include US IBD/TIPP & JOLTS, Swiss CPI, Australian PMI (Final), Fed’s Bostic, ECB’s Lane & Valimaki.</p>
<p><a href="https://forextraderhub.com/wp-content/uploads/2023/10/Copper.jpg"><img decoding="async" class="alignnone size-full wp-image-735343" src="https://forextraderhub.com/wp-content/uploads/2023/10/Copper.jpg" alt="" srcset="/wp-content/uploads/2023/10/Copper.jpg 1200w, /wp-content/uploads/2023/10/Copper-300×156.jpg 300w, /wp-content/uploads/2023/10/Copper-1024×533.jpg 1024w, /wp-content/uploads/2023/10/Copper-768×400.jpg 768w, /wp-content/uploads/2023/10/Copper-696×363.jpg 696w, /wp-content/uploads/2023/10/Copper-1068×556.jpg 1068w, /wp-content/uploads/2023/10/Copper-806×420.jpg 806w" /></a></p>
<p><strong>Interesting Mover: Copper -1.0% @ $3.6065</strong>, is clearly losing the $3.70 area and below the <span>$3.62</span> support, has been rejected by its <strong>50MA</strong> and lost 1yr long uptrend, <strong><span>$3.53</span></strong> is its next relevant support.</p>
<p> </p>
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<p><strong>Marco Turatti<br />
</strong></p>
<p><strong>Market Analyst</strong></p>
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<p><a href="https://analysis.hfm.com/735280/">Source link </a></p><p>The post <a href="https://forextraderhub.com/market-update-october-3-risk-off-bites-across-asset-classes.html">Market Update – October 3 – Risk off bites across asset classes</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>
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