The latest economic data in the US has caused some turbulence in the markets. The US October non-farm payrolls came in at +12K, falling far short of the expected +113K. This led to an immediate drop in the US dollar, particularly affecting USD/JPY. However, the dollar’s losses were eventually recovered.
One of the factors contributing to the dollar’s recovery was the rapid increase in Treasury yields, reaching 4.38%. This rise in yields also had an impact on commodity currencies and the euro, as it increased risk aversion in the market.
The bond market’s movement is not entirely clear, but it could be influenced by various factors such as uncertainty surrounding the upcoming US election and recent events in the UK bond market. Additionally, the prices paid component of the ISM manufacturing survey showed signs of inflation, sparking some concerns among investors.
As we approach the US election, market volatility is expected to continue. The tension is rising, and betting odds have shifted towards Harris more recently, adding to the uncertainty in the market. It is crucial for investors to stay informed and prepared for potential market swings in the upcoming week.
In other news, China has announced loosened rules for foreign investors in equities, which could have implications for global markets. Gold prices have dropped, while US 10-year yields have seen an increase. WTI crude oil prices have also risen slightly, and the S&P 500 saw a modest increase.
Overall, the market is experiencing a mix of economic data reactions and election-related positioning. It will be essential for investors to stay vigilant and cautious in the current market environment. Have a great weekend and get ready for what could be a volatile week ahead.
