It has been another volatile ride on Thursday, with stocks falling heavily after data showed that the US ISM services sector activity fell to a reading of 52.6 in September, the lowest since August 2016, from 56.4 in August, amid rising concerns about tariffs, suggesting that trade tensions are spilling over to the broader economy. The fall was followed by an equally sharp bounce as bargain hunting buyers stepped in and the indices generally ended up by 0.25%-0.5% on the day.
In the FX markets, the US$ is generally a little weaker after a choppy session, with US$Jpy in focus as it followed the gyrations of the stock market. As with stocks, US$Jpy has recovered from its lows, but still remain heavy as safe haven demand still sees plenty of demand for the Jpy ahead of the upcoming NFP release. The Aud$ and Kiwi continued to recover from the recent selloff while Cable also put in a positive session, underpinned by news that UK PM Boris Johnson’s latest Brexit proposal has been well received by his fellow Conservatives, including some pro-EU former ministers.
Gold saw ongoing demand and finished about 0.25% higher but WTI headed in the other way as it eyes the possibility of a global slowdown, and fell by 0.25%, albeit well above its lows as it tracked the moves in stocks.
Looking ahead, there is really not a lot on the calendar for Friday until the US jobs report (exp 3.7%, +140K, AHE; +0.3%mm, AWH; 34.4) and until then it should be pretty quiet, although the Australian August Retail Sales (exp 0.5%mm) may provide some volatility in the Aud$, while the RBA’s Ellis will also be speaking. Have a good weekend.
Economic data highlights will include:
Fri: China National Holiday, Australian Retail Sales, RBA’s Ellis Speech, US Jobs/NFP/Average Hourly Earnings, Trade Balance
Market moves, in brief:
FX: DXY 98.91 (-0.11%)
Bonds: US10Y; 1.54% (-4.13%), German 10Y; -0.588% (-7.38%), UK 10Y; +0.388% (-6.10%), Australian 10Y; 0.929% (-5.04%), NZ 10Y; 1.035% (-3.36 %), China 10Y; 3.125% (-0.33%)
Stock Indices: DJI; +0.47%, S+P; +0.80%, NASDAQ; +1.12%, EUStoxx50; +0.12%, FTSE100; -0.63%,
Metals: Gold $1505 oz (+0.34%), Silver $17.56 oz (-0.02%), Copper $2.5545 lb (-0.62%), Iron Ore $92.26 per tonne (NYMEX) (0.00%),
Oil: WTI $52.32 pb (-0.21%)
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