Giles Coghlan LLB, Lth, MA
Financial Source
Monday started with a risk-positive footing after the miss from the US ISM Manufacturing data. A miss across the board sent investors running to sell the USD, buy gold and silver (on USD weakness), and they also turned positive on stocks. Why? Bad data was seen as good news, since it meant the Fed may be less aggressive in hiking rates. At the time of writing the Non-Farm payroll will be eagerly anticipated. A miss there, with a headline below 200K, then investors will likely further anticipate a ‘Fed pivot’ and run ‘risk on’ again.
Other key events from the past week
Twitter: Musk Buys Twitter, Oct 05: Elon Musk has finally agreed to buy Twitter for $54.20 a share after months of wrangling and trying to avoid buying the company. Twitter says it intends to close the deal, so will we see gains for Twitter shares?
RBA: Hikes by 25bps, Oct 04: The RBA surprised markets with a 25 bps hike after Short Term Interest Rate Markets saw a 50% chance of a 50bps hike. The terminal rate expectations fell sharply lower post the meeting, so does that mean AUDNZD is selling ahead after the RBN kept a more hawkish stance?
USD: Mixed US ISM Data, Oct 03 & 05: The US ISM Manufacturing PMI was a miss, but the US Services PMI headline print showed strength. All focus is now on the NFP to see the chances of a Fed pivot! A big miss here and traders will likely turn ‘risk positive’ and buy stocks to end the week.
Key events for the coming week
USD: US inflation, Oct 13: Next week traders will be looking closely at the US core inflation print. If the core comes in below 6.2% y/y and the m/m below 0.4% then watch out for potential gains in gold and silver.
How will Twitter’s share prices react? Twitter has a seasonally weak period ahead.
USD: Retail sales, Oct 14: US retail sales will give markets a sense of how concerned the US consumer is feeling regarding coming interest rate hikes. They will also be looking at the US Michigan Consumer expectations on the same day. Register here for our free trading webinar to find out how to trade it.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.