North American News
It’s a holiday in the US and Canada today
- It’s Labor Day
If you’re wondering why the market is a bit quieter than usual today it’s because the US and Canada are off today to celebrate Labor Day.
Dollar reigns as risk aversion leads
The greenback started the week advancing against most major rivals, although a Federal holiday in the US maintained volumes at their lows and major pairs within limited intraday ranges.
Commodities
Gold drops from daily highs but still above the $1700 figure
- Gold price barely slides 0.13%, weighed by higher US T-bond yields and a strong US dollar.
- Tensions between Europe and Russia threaten to worsen Europe’s energy crisis.
- US Calendar: Fed’s Mester, and Powell, to hit the stand on Wednesday and Thursday, respectively.
Gold price losses some of its brightness at the beginning of the week, down by 0.49%, in a thin liquidity trading day, with US markets, closed in the observance of Labour day. At the time of writing, the XAU/USD is trading at $1710 a troy ounce.
Monday’s market narrative includes tensions arising due to the energy crisis in Europe. Russia’s Gazprom halted natural gas flows through the Nord Stream 1 pipeline, citing a leak. Nevertheless, the headline crossed newswires after a G7 reunion put a lid on Russian oil prices.
In the meantime, the US Dollar Index, a measure of the buck’s value vs. a basket of six currencies, gains 0.20%, a headwind for the yellow metal, up at 109.826. The US 10-year benchmark note rate followed suit, gaining four bps at 3.231%.
Last week’s employment figures, released on Friday by the US Department of Labor, revealed that the US economy added 315K jobs in August, higher than forecasts to 298K. Although it was a positive reading, reinforcing the case for the Fed going 75 bps, the previous two months were downward revised by 107K.
Worth noting that the Unemployment Rate ticked up 3.7%, showing signs of softening. After data’s released, Federal Fund rates (FFR) futures easied a tone. Markets expected that the US central bank would tighten 63.9 basis points instead of 68.
OPEC+ agrees to cut output by 100k bpd
- That didn’t take long
It only took minutes for OPEC+ to agree to cut production by 100k bpd. That unwinds last month’s announced increase.
The new quotas will take effect for October.
EU News
European stocks hold up better than feared after the Nord Stream 1 cutoff
- Stocks down but not horribly
It’s early days but European markets are holding up better than feared after Nord Stream 1 was cut off. Share prices rallied around 3% on Friday but Gasprom made the announcement after the close and US ETFs indicated it would all be given back.
Instead there was this:
- Stoxx 600 -0.6%
- German DAX -2.2%
- FTSE 100 – flat
- French CAC -1.3%
- Spain IBEX -0.7%
- Italy MIB -2.0%
Other News
EU’s Borrell says he’s less confident today on an Iran nuclear deal closing
- Comments from EU’s Borrell
- Says Iran nuclear talks are diverging not converging
Separately, a WSJ reporter is saying that one of the main problems is the IAEA probe into Iran nuclear irregularities. Previously they had been seeking a close to it explicitly, now they’re seeking for an intended day for it to be closed before implementation.
UK PM Truss: I will deliver a bold plan to cut taxes and grow the economy
- Remarks by newly appointed UK prime minister, Liz Truss
- Will deal with the crisis in people’s energy bills
- Will deal with long-term issues on energy supply
She’s going to have a tough time to balance out keeping a tight fiscal line and throwing money at the problem in trying to tackle the energy and cost-of-living crisis that is worsening in the UK.
Cryptocurrency News
Bitcoin price dumps some more as bulls push for lower prices
- Bitcoin price is back in the buy zone despite its recent drop to $19,620.
- BTC price may stretch losses to tag June lows if support at $19,600 crumbles.
- Bitcoin price flaunts turnaround move above $20,000, but whales must keep accumulating.
Bitcoin price carried on last week’s losing streak amid fears of further losses. Investors foreshadow another crypto crash with the upcoming major event – the Ethereum Merge. The market is conflicted, with some participants believing the Merge has already been factored in. In contrast, others augur a sell-the-news scenario with immense losses.