Those looking for bad news will not be disappointed, with plenty to go around. Although markets in the eurozone are nursing a mixture of small gains and losses, the FTSE is revisiting August lows. In perhaps the most worrying sign, German manufacturing data was revised lower for September, showing a contraction in the sector and hitting a 15-month low. French data was maintained at its same grim level, and budget figures, while displaying commendable Gallic disregard for EU deadlines, underscore how deep France’s problems are. UK manufacturing was in retreat as well, slumping to a 17-month low, which pushed the pound back through $1.62. Dire news from the supermarket sector shows that investors should still be looking elsewhere, as Sainsbury’s cuts forecasts for the year and Tesco comes under investigation from the FCA. Any rally in supermarket shares will be an invitation for fresh selling, after months in which shorters have made hay.
It wasn’t a great finish to the third quarter, although the S&P 500 is still holding on to its winning streak, and it looks like the new quarter will be starting on a weak note. With Hong Kong still in lockdown and Ukraine rumbling in the background, the macro environment is not particularly supportive of equity gains. Oil prices are another cause for concern, especially since OPEC doesn’t seem to be wavering in its production commitments. Long-term equity trends have come under pressure but the Dow is still showing a distinct reluctance to drop below 17,000. Ahead of the open, we expect the index to start ten points higher at 17,052.
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AUD/USD remains under pressure above 0.6400
AUD/USD managed to regain some composure and rebounded markedly from Tuesday’s YTD lows in the sub-0.6400 region ahead of the release of the Australian labour market report on Thursday.
EUR/USD faces decent contention around 1.0600
The knee-jerk in the Greenback reignited some buying interest in the risk complex and pushed EUR/USD to three-day highs near 1.0680, rapidly leaving behind the recent yearly low around 1.0600.
Gold eases despite risk-off mood
Gold trades in a relatively tight range near $2,390 in the second half of the day on Wednesday. In the absence of high-tier data releases, investors keep a close eye on headlines surrounding the Iran-Israel conflict.
Ethereum trades around the $3,000 support following a surge in validator queue
Ethereum (ETH) continued a sideways movement on Wednesday as investors seemed to be waiting for an upward or downward price catalyst. Despite the price stagnancy, the ETH validator queue - possibly fueled by the DeFi restaking boom - rose sharply.
Markets stabilize after Powell rules out rate hike, but the signs don’t look good
Markets are volatile right now; however, a relative calm has descended on the market and US. US stocks are down a touch, but the Vix is lower, US Treasury yields are lower, and the dollar is mostly lower vs. its G10 FX counterparts.