Selloff halted in its tracks

Chris Beauchamp IG

Tuesday's losses are being reversed thanks to some dovish Fed talk and a weaker ADP report, says Chris Beauchamp, Chief Market Analyst at online trading and investing platform IG.

Stocks recover and volatility slumps in turnaround for risk assets

What a difference a day makes. Yesterday it seemed like September was about to see a cocktail of worries unleashed upon investors, and yet today this late summer storm seems to have dissipated. Stocks are mostly up, particularly in the US, as is gold, while oil and volatility are both lower. The question must be asked, how much of yesterday’s angst was just a combination of ‘back to school’ for markets and the usual ‘first day of the month’ syndrome? Bond market troubles don’t disappear overnight, but yesterday’s surge in yields was nothing compared to 2022, so perhaps everyone just got a little overexcited.

Fedspeak halts dollar rally

Just as night follows day, so a dovish Fed speech is here to calm troubled waters from Warsh’s Jackson Hole outing. John Williams’ stance has helped to soothe nerves today, giving a particular boost to rate-sensitive US small-cap stocks, while putting the dollar firmly on the back foot against the yen. A soft ADP figure helped too, and now all eyes are on Friday’s payrolls to back up the view.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

AUD/USD eyes 100-SMA hurdle near 0.7035 as hawkish RBA counters firmer USD

AUD/USD regains positive traction on Tuesday and climbs to 0.7030 during the Asian session, reversing the previous day's corrective slide from a one-month high as hawkish RBA rate expectations continue to support the Aussie. Spot prices, however, remain below the 100-day SMA pivotal resistance amid a firmer US Dollar as traders brace for Australia’s September CPI report on Wednesday ahead of the Fed rate decision.

USD/JPY sticks to modest gains above 157.50 as traders await Fed, BoJ meetings

USD/JPY attracts buyers for the third straight day, recovering further from a one-month low ahead of Wednesday’s FOMC decision and the BoJ policy update on Friday. Meanwhile, expectations that the BoJ may hold off on aggressive rate hikes weigh on the Japanese Yen, and the US Dollar advances to a nearly two-week high, supporting the currency pair.

Gold bears flirt with $4,000 amid sustained USD buying ahead of FOMC decision

Gold meets with a fresh supply during the Asian session, stalling the previous day's modest bounce from the vicinity of a three-month low amid a firmer US Dollar. The precious metal, however, defends the $4,000 psychological mark as traders now seem hesitant and opt to wait for the outcome of the two-day FOMC policy meeting on Wednesday.

Pi Network stalls as weak crypto sentiment caps recovery

Pi Network (PI) holds steady above $0.0760 at press time on Tuesday, stalling after a roughly 2% rebound the previous day. The broader market's weak sentiment and reduced trading volume weigh on the PI token. The technical outlook is bearish, with price capped below a long-term resistance trendline and weak momentum.

France tests the Euro's nerve: What the OAT spread is telling FX traders

France's 10-year borrowing premium over Germany hit its widest since the 2011 debt crisis last week. With public spending above 57% of GDP, unrest on the streets and a presidential election next spring, cuts look unlikely. If Paris cannot trim, the bill may be paid quietly through financial repression.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.