Oil inventory data revealed a larger-than-expected build in headline crude oil. The Federal Reserve’s Collins stated that labor markets are in a positive state overall. Major indices closed higher, and it was mentioned that the Fed predicts 50 basis points of cuts by the year’s end. Talks are in progress for a phone call between Biden and Israel’s Netanyahu. Crude oil settled at $73.57, and Israel’s defense minister Gallant canceled a trip to Washington. There are reports that Israel is contemplating attacking energy facilities in Iran. The US treasury auctioned off $58 billion of 3-year notes at a high yield of 3.878%. Atlanta Fed President Bostic noted that the labor market has slowed down but is not weak. Kinder Morgan is securing a pipeline in Florida. European equities saw a decline as the China glow faded. The Atlanta Fed’s Q3 GDPNow projection is at +3.2% versus +2.5% previously. Hurricane Milton is forecasted to remain a major hurricane as it expands in size. Reports suggest that Israel may target Iran’s military and intelligence sites. Jamie Dimon expressed that AI is real and will bring significant changes. Technical analysis was highlighted for the major currency pairs, with the JPY being the strongest and the AUD the weakest at the start of the NA session. Additionally, Canadian August trade balance was $1.10 billion compared to an expected -$0.50 billion, and the US international trade balance for August was $-70.4 billion versus an estimated -$70.6 billion. In the US debt market, yields decreased with a steeper bias.
In terms of currency pairs, the NZD ended the day strong, with the NZDUSD pair trading between key moving averages. The USDJPY pair held support at 147.338 and rose above its 38.2% retracement level. The EURUSD moved upward but faced resistance near the 50% midpoint level. The USDCHF fell initially but found support at the rising 100-hour MA. Yields in the US treasury market saw a decline, with the auction of three-year notes at a higher yield than expected. The US stock market rebounded, with major indices closing higher. In the European equity markets, most indices were lower except for Spain’s Ibex. The focus shifted to the Asia-Pacific market, with China and Hong Kong indices in the spotlight. China’s return from the Golden Week holiday saw gains in the Shanghai index but a decline in the Hang Seng index.
The market movements and geopolitical events discussed in the article highlight the interconnectedness of global financial markets and the impact of political decisions on various asset classes. Traders and investors must stay informed about economic data releases, central bank statements, and geopolitical developments to make well-informed decisions in the financial markets.
