North American News
US stock markets soar for the second day in a row
- Closing changes for the main markets
US equities are now up more than 5% in just two trading days in October. That’s an phenomenal start after a 9% decline in September.
Today’s changes:
- S&P 500 +112 points to 3790 or +3.1%
- DJIA+2.8%
- Nasdaq +3.3%
- Russell 2000 +3.9%
- Toronto TSX +2.6%
Bear market rallies can be incredibly powerful and this certainly looks like a repeat of what happened in July but that’s trading. On top of that, every long-term rally started with people calling it a bear market rally.
JOLTs job openings for August 10.053M vs. 10.775M est. Largest one month drop on record
- JOLTs job openings and data for August 2022
- Prior month 11.239M
- Job openings 10.05M vs 10.775M est. First time under 11M since September 2021.This was the largest one month drop on record
- job openings -6.2%
- hires were little change at 6.3 million. The rate was unchanged at 4.1%
- total separations including quips, layoffs, and discharges and other separations were also little change at 6.0 million
- Quits rate unchanged at 4.2 million. The quit rate is a measure of workers willingness or ability to leave jobs.
- layoffs were also little changed
- For the job openings, the largest decreases were in healthcare and social assistance, -236K, and other services -183K and retail trade -143K
in the US debt market:
- 2 year yield 4.05%, -4 point basis points
- 10 year yield 3.579%, -7.2 basis points
- 30 year 3.658%, -4 point basis points
Commodities
Gold bears are lurking in daily moving average cloud and confluence of resistance
- Gold has rallied towards last week’s highs as the US dollar and yields drop, risk rallies.
- Gold bears focus on the downside and a 50% mean reversion near the $1,685/75 area.
The gold price rallied on Tuesday printing a fresh high for the week so far around $1,730 and traders have their sights set on September’s high of $1,735. The yellow metal rallied from a low of $1,695.24 on the day as the US yields made fresh lows of 3.564% in the benchmark 10-year Treasury yield while the US dollar got smacked down on yet further data disappointments.
Silver reaches three-month highs above $21.00 on a risk-on impulse
- Silver price clears the $21.00 mark, courtesy of broad US dollar weakness amidst falling US bond yields.
- Speculations that the Fed would tighten at a slower pace spurred the equities recovery since Monday.
- US factory orders remained unchanged, while job openings, fell.
Silver price continues to extend its recovery during the week, climbing above the $21.00 figure for the first time since June 2022, spurred by a soft US dollar and falling US Treasury bond yields. At the time of writing, XAG/USD is trading at $21.02, up by 1.66%, as the North American session progresses.
US equities are trading in the green, signaling investors appetite improving. The greenback remains heavy due to speculations that the Fed might tighten at a slower pace of increases after a reading of US manufacturing activity flashed signs of tempering.
That said, the US Dollar Index, a gauge of the buck’s value vs. a basket of peers, creeps lower by 1.14%, at 110.389, undermined by US Treasury bond yields. The US 10-year benchmark note rate coupon is down two bps at 3.619%.
Data-wise, the US economic docket featured factory orders for August, reported by the US Commerce Department. Figures came at 0%, after July’s reading of -1%. Meanwhile, the US Labor Department revealed that job openings in the US dropped, though they remained at higher levels. The US JOLTs report for August showed that vacancies dropped from 11.239M in July to 10.053M in August.
In the meantime, Fed policymakers continued to grab the headlines as Fed Williams, Barkin, Jefferson, and Daly crossed wires.
New York Fed President John Williams said that the Fed’s “job is not yet done” while adding that rates are “not yet in a restrictive place for growth.” Richmond’s Fed Barkin said that a strong dollar has potential spillover effects on the global economy but stressed that the Fed is focused on the US economy.
San Francisco Fed Mary Daly said that further rates are needed, and then the Fed needs to hold restrictive policies in place until “we are truly done” on reaching the Fed’s goal. Earlier in his first remarks, Philip Jefferson said that inflation is the most serious problem facing the Fed. He added, “Restoring price stability may take some time and will likely entail a period of below-trend growth.”
OPEC+ output cut could come from existing production not quotas – report
- The OPEC+ meeting is tomorrow
OPEC+ is getting set to make a big power play tomorrow from all the reports that are leaking. The latest is that OPEC+ is considering a 1-2 million barrel per day cut “or more” but that it could be phased in over several months.
It also cites a person familiar that said the cuts would be made from existing production not from quotas. If true, that’s a significant difference.
EU News
European equity close: Huge gains with a rip into the close
- Closing changes for the main European bourses
- Stoxx 600 +3.1%
- UK FTSE 100 +2.6%
- German DAX +3.8%
- French CAC +4.1%
- Italy MIB +3.3%
- Spain IBEX +3.5%
Other News
Bank of England buys nothing in daily gilt operation, rattling the bond market again
- Gilt yields rise again
There’s some kind of disconnect here between the market and the Bank of England. Yesterday’s daily operation resulted in just £22.1m in gilt purchases with £1.89b offered. Today the BOE bought nothing with £2.26B offered.
The gilt market doesn’t like it with 10-year yields up 6 bps in short order.
White House says not considering new SPR releases
- White House not in the mood to release more oil
I’m an optimist, so I’d like to believe that the White House has seen the writing on the wall and realized there’s not nearly enough money going into oil exploration and development to keep oil from ripping through $100 in medium term. That they’ve realized that by fighting it, they would only be suppressing needed investment further.
Cryptocurrency News
XRP Price: Binance announces new XRP investment product, fuels rally in the altcoin
- Binance added XRP to its list of Dual Investment products and published an official blog post to announce the new listing.
- XRP holders are awaiting the US Securities and Exchange Commission’s next move.
- Analysts believe XRP price is on track for a 25% rally in the ongoing bear market.
Binance, the world’s largest exchange by volume, added XRP to its list of Dual Investment products. The exchange announced the launch of the product on its official blog and informed users about a fresh batch of dual investment products with revised target prices and settlement dates.
Why addition of XRP to Binance Dual Investment products matters?
Binance users can buy cryptocurrencies at a lower price and sell them at a higher price in the future through dual investment products. The world’s largest exchange by volume has added XRP to this list and this allows users to earn a high yield during the subscription period irrespective of the direction in which the price moves.
Binance currently offers two types of dual investment products, buy low and sell high. The new XRP product is available for trade on Binance from October 4, 10:00 UTC and the subscription format is first come first serve. The Annual Percentage Rate (APR) for the product ranges between 4% and 179%.
The official announcement noted that the product may stop accepting new subscriptions at any moment.
XRP holders are awaiting updates on the ongoing SEC v. Ripple case to identify the direction in which the altcoin’s price will move. The latest court ruling lacks updates and comments and the general sentiment among holders is bullish.