Round up of today's market news *

North American News

Major US Indices Close Higher as S&P and Dow Jones Leads The Way Ahead of CPI Data

US stocks finished the day on a high note, with the S&P 500 and Dow Jones Industrial Average achieving record closings. Investors are now looking forward to the Consumer Price Index (CPI) data set to be released tomorrow morning at 8:30 AM.

Market Performance:

Dow Industrial Average: Rose 431.63 points (+1.03%), closing at 42,512.00
S&P 500 Index: Increased by 40.91 points (+0.71%), settling at 5,792.04
NASDAQ Index: Gained 108.70 points (+0.60%), finishing at 18,291.62, approximately 1.9% shy of its all-time high of 18,467.58
Russell 2000: Up 5.60 points (+0.26%), closing at 2,200.58

Notable Movers in the Magnificent Seven: Despite the overall market gains, performance varied among key tech stocks:

Apple (AAPL): +$3.77 (+1.67%)
Amazon.com (AMZN): +$2.45 (+1.34%)
Microsoft (MSFT): +$2.75 (+0.66%)
NVIDIA (NVDA): -$0.24 (-0.18%)
Meta Platforms (META): -$2.55 (-0.43%)
Tesla (TSLA): -$3.45 (-1.41%)
Alphabet A (GOOGL): -$2.52 (-1.53%)

Other Notable Gainers: Several stocks outside the major indices saw impressive gains, including:

Celsius (CELH): +6.16%
Snowflake (SNOW): +5.42%
Corning (GLW): +4.82%
Super Micro Computer (SMCI): +4.28%
General Motors (GM): +4.21%
Palantir (PLTR): +4.05%
Pfizer (PFE): +3.48%
Arm (ARM): +3.36%
Fortinet (FTNT): +3.27%
Chewy (CHWY): +3.01%
Roblox (RBLX): +2.99%
Broadcom (AVGO): +2.89%

Market Sentiment: Today’s strong performance reflects positive investor sentiment ahead of the CPI data release, with traders optimistic about the potential economic implications. The mixed results among tech giants indicate a cautious but bullish outlook as the market prepares for critical inflation figures that could influence future Federal Reserve policy.

US treasury auctions of $39 billion of 10-year notes at a high yield of 4.066%

Results of the $39 billion, 10-year auction

bid-to-cover ratio 2.48
high yield 4.066% vs 4.062% pre-sale WI
sells $39 bln
awards 99.31% of bids at high
primary dealers take 13.93%
direct 8.44%
indirect 77.63%

Atlanta Fed GDPNow growth estimate for Q3 unchanged at 3.2%

In their own words:

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2024 is 3.2 percent on October 9, unchanged from October 8 after rounding. After this morning’s wholesale trade release from the US Census Bureau, the nowcast of third-quarter real gross private domestic investment growth decreased from 3.4 percent to 3.3 percent.

US mortgage applications -5.1% vs -1.3% prior

Data for week ending 4 Oct

US mortgage applications -5.1% vs -1.3% prior
US mortgage market index 277.5vs 292.3 prior
US mortgage purchase index 149.2 vs 149.3 prior
US MBA 30-year mortgage rate 6.36% vs 6.4% prior

US August wholesale sales -0.1% vs +0.5% expected

Soft US wholesale sales
Prior was +1.1%
Inventories +0.1% vs +0.2% exp

FOMC Minutes: A substantial majority of participants supported a 50 basis point cut

Highlights from the September FOMC Minutes

“Substantial majority” supported 50bp cut
Committee gained “greater confidence” inflation moving sustainably toward 2% goal
Risks to employment and inflation goals now seen as “roughly in balance”
Economic activity expanding at “solid pace”, job gains slowed but unemployment remains low
Inflation made “further progress” but still “somewhat elevated”
Most participants see balanced risks to inflation outlook
Some members would have preferred 25bp cut, citing still-elevated inflation and solid growth
Bowman dissented, preferring 25bp cut due to core inflation well above target
Members anticipate moving toward more neutral policy stance over time if data evolves as expected
Committee will “carefully assess” data for additional rate adjustments

Fed Officials’ Opinions and Agreements

A Few

Suggested firms were reluctant to lay off workers after struggling to hire post-pandemic.
Agreed that a 25 bps move could signal a predictable path for policy normalization.
Stressed that the overall policy path was more critical than the specific amount of easing.

Some

Noted the labor market remained solid with low layoffs and unemployment claims.
Emphasized that businesses were reducing labor demand by posting fewer jobs and using attrition.
Warned that reducing policy restraint too early or too much could risk inflation progress.
Acknowledged there was a case for a 25 bps rate cut at the prior meeting.

Several

Observed slowing wage growth and emphasized the need for disaggregated labor market data.
Mentioned that policy restraint, if reduced too soon, could stall inflation progress, while reducing it too late could weaken the economy.
Discussed the ongoing balance sheet reduction even if the federal funds rate was reduced.

Many

Agreed recent inflation data aligned with reports of limited pricing power among businesses.
Noted inflation in Q2 and Q3 of 2024 suggested that stronger inflation in Q1 was a temporary setback.
Expected GDP growth to align with the trend rate in the coming years.
Found labor market developments challenging to evaluate due to factors like immigration and payroll data revisions.

Most

Had a consensus expectation of a 25 bps rate cut at the meeting.
Were not overly concerned about a near-term economic downturn but recognized growing downside risks to employment.

Almost All

Judged recent inflation readings consistent with achieving the 2% target.
Gained confidence that inflation was moving sustainably toward the 2% goal.
Agreed that upside inflation risks had diminished, while downside risks to employment increased.

A Substantial Majority

Supported lowering the federal funds rate target range by 50 bps to 4.75%-5%.

Morgan Stanley expecting slight deceleration in tomorrow’s CPI

Key components to watch is OER, used cars and car insurance

Morgan Stanley expects a slight deceleration in tomorrow’s headline inflation data.

Core CPI is projected at 0.26% MM and 3.2% YY

Headline CPI is projected at of 0.09% MM and 2.3 YY

The main components to watch for tomorrow:

Housing inflation is expected to soften, with rents anticipated to decelerate, particularly due to adjustments in the Owner’s Equivalent Rent (OER) calculations and seasonal factors.
Used car prices are expected to accelerate, which will push goods inflation into positive territory.
Car insurance is expected to continue its downward path, with car insurance expected around 13% YY (versus the prior of 17% YY).

Fed’s Logan: A ‘more gradual’ path on rate cuts likely appropriate from here

Comments from the Dallas Fed President

Upside risks to inflation mean Fed should not rush to reduce rates
I continue to see a meaningful risk inflation could get stuck above target
Lowering policy rate gradually would allow time to judge how restrictive monetary policy may or may not be
Normalizing policy gradually also allows Fed to ‘best balance’ labor market risks
Less restrictive policy will help avoid cooling labor market more than necessary
Progress on inflation has been broad-based, labor market has cooled but remains healthy
Inflation, labor market ‘within striking distance’ of Fed goals
As labor market has cooled, we case more risk it will cool beyond what is needed to get inflation to return to 2%
Spending and economic growth that’s stronger than forecast poses upside risk to inflation

Tesla ($TSLA) to offer a 0% APR loan rate for new Model 3, Model Y finance orders in US

Starting today in the US (this evening) Tuesday October 8

Hitting social media outlets, seems legit, trying to confirm:

Tesla offering a record low loan rate of 0% APR for new Model 3 and Model Y finance orders in the U.S.

loan terms up to 72 months
a minimum down payment of 15%
$7,500 Federal tax credit will be applied, if eligible

Deutsche Bank on S&P 500: “October in a presidential election year might be a struggle”

DB see better times in November and December though

This chart from Deutsche Bank is getting some love out there, showing that US benchmark index “is still experiencing its strongest YTD performance of the 21st century so far, having risen by +19.4% since the start of the year.”

Of more interest though is what DB analysts see for the next few months:

Looking forward, seasonal patterns show that declines are relatively rare at this time of year.
Since 2000, 19 of the 24 completed years have seen the index rally in Q4, higher than any other quarter.
But we are in a very tight election campaign and if history repeats itself, then October in a presidential election year might be a struggle before brighter times ahead in November and December.
Outside of the influence of macro, politics and geopolitics, US earnings season will be a key focus from this week.

US inflation data due this week: BofA predicts a +0.1% m/m headline CPI, +0.3% m/m core

Synopsis:

BofA anticipates a modest rise in both headline and core CPI for September, indicating firm core inflation without immediate cause for concern.

Key Points:

CPI Forecasts: BofA predicts a 0.1% m/m increase in headline CPI and a 0.3% m/m rise in core CPI. The anticipated decline in energy prices is expected to soften the headline print, while sticky rents and rising used car prices will contribute to a firmer core reading.

Year-over-Year Expectations: On a year-over-year basis, BofA expects the headline CPI to drop by two-tenths to 2.3%, with core CPI remaining stable at 3.2%. The headline NSA index is projected to print at 314.827.

Core PCE Implications: Based on these CPI forecasts and trends in inflation for PPI components of PCE, BofA projects core PCE inflation at 0.18% m/m. While this would be a positive result, it does not signal a drastic change in inflation dynamics that would influence the size of the next Fed rate cut.

Conclusion: BofA suggests that while inflation continues to trend in the right direction, the upcoming CPI report will likely not alter the Fed’s course significantly. The findings support the potential for further rate cuts but do not warrant alarm regarding inflation levels at this time.

Fed Vice-chair Jefferson says Bank has not changed its approach to monetary policy

Federal Reserve Vice Chair Philip Jefferson:
Fed has not changed its approach to monetary policy
Fed is always thinking about the balance of risks
Our goal has been to bring inflation down without causing undue or a disorderly increase in the unemployment rate
Performance of labour market gave us headroom to keep policy restrictive for a long period
Size of September rate cut was timely
Fed’s rate cut was neither proactive or reactive
Important not to focus on narrow measures of inflation, labor market
need to look at totality of the data
Fed aims to create economy with inflation at 2% and employment as high as possible
if we do that, it will be possible for interest rates to be normalized
Fed can’t influence housing affordability directly
takes time to bring inflation down
have been making gradual but good progress in bringing down rate of housing inflation

Guggenheim CIO says inflation of up to 4% could be a new normal

If US inflation returns to 2% it won’t stay there long

Bloomberg (gated) carries remarks from Guggenheim Partners Investment Management chief investment officer Anne Walsh, who spoke at the Greenwich Economic Forum in Connecticut on Tuesday.

In brief:

“We’re in a reflationary world for the first time in a while”
when inflation returns to the Fed’s 2% target, policymakers “should probably take that ridiculous collar off and work within a range because I don’t think that level is something they can stay at for a long time”
skeptical on China’s stock market

Commodities

Gold Extends Losses Amid Fed Minutes and Awaited CPI Data

Gold prices fell for the sixth consecutive day as traders weighed the Fed’s September Meeting Minutes and lowered expectations of further rate cuts.

Gold Drops Amid Fed’s Rate Cut Signals
Gold declined 0.37%, trading near $2,610 after the Federal Reserve’s September Minutes revealed that a “substantial majority” of the Federal Open Market Committee (FOMC) supported a 50 bps rate cut. However, some participants leaned towards a 25 bps cut. The divergence in opinions leaves traders uncertain about the Fed’s future policy direction. The Minutes also highlighted that inflation risks are seen tilting to the downside, while labor market risks remain on the upside.

The CME FedWatch Tool now shows lower odds of a 25 bps cut, with expectations falling from 85.2% to 75.9%, while the likelihood of a rate pause increased to 24.1%. As the market adjusts, attention shifts to Thursday’s US Consumer Price Index (CPI) for clues on inflation trends.

Focus on US CPI and Economic Data
Traders anticipate the upcoming CPI data to offer more clarity on the Fed’s rate path. Projections suggest a year-over-year decline from 2.5% to 2.3%, with core CPI holding steady at 3.2%. If inflation comes in higher than forecasted, the possibility of the Fed pausing its rate cuts could increase.

Other economic reports due this week include Initial Jobless Claims, with estimates at 230,000, up from 225,000 in the previous week. Fed speakers like Vice-Chair Philip Jefferson and Boston Fed President Susan Collins are expected to share data-driven insights on the potential rate adjustments based on recent economic performance.

China’s Bullion Purchases and PBoC Halt
Meanwhile, the People’s Bank of China (PBoC) paused its gold purchases for the fifth month, with reserves unchanged at 72.8 million troy ounces.

Crude oil settled at $73.24

Down -$0.33 from -0.45%

Crude oil futures are settling at $73.24. That is down -$0.33 or -0.45%. The low price today reached $71.58. The high price extended to $74.41.

Technically, looking at the daily chart, the price today fell below its 50 day moving average and the broken 38.2% retracement near $72.60, and rotated to the low of the swing area near $71.44 before rotating back to the upside the low price was at $71.58.

The price is also back above the 38.2% retracement but below the 50% midpoint of the range since the July high. Getting above the 50% midpoint at $74.89 and then the 100 day moving average at $76.01 and 200 day moving average at $77.39 would increase the bullish bias.

On the downside a move below $71.44 would increase the bearish bias.

EIA weekly oil inventories +5810K

Weekly US oil inventory data from the EIA

Crude oil inventories +5810vs +2048K exp
Gasoline inventories –6304K vs -1123K exp
Distillates inventories -3124K vs -1865K exp
Refinery utilization -0.9% versus expectations of -0.1% exp

Geopolitical risk premium in oil market eases slightly, says Goldman Sachs

Goldman Sachs reports a decrease in the geopolitical risk premium for oil, with potential price upsides if disruptions occur in Iranian production.

Geopolitical risk premium in oil market eases slightly, says Goldman Sachs. Goldman Sachs reported that the geopolitical risk premium in the oil market has slightly decreased this week, following sharp increases in Brent crude implied volatility and call options implied volatility skew last week.

Oil prices steadied, with Brent crude futures trading at $77.72 per barrel, as traders balanced Middle East tensions with bearish demand expectations.

Goldman Sachs still sees a potential upside of $10-$20 per barrel for Brent in the event of disruptions to Iranian production, though prices could stabilize near current levels absent major disruptions.

Morgan Stanley raised its Brent price forecast to $80 a barrel (from $75) for Q4 2024

Morgan Stanley has bumped its forecast for Brent crude oil in the final quarter of 2024 to $80 / Barrel

up from its previous forecast of $75

MS cite heightened geopolitical risk. MS are wary though, saying demand is weaker than expected and supply has been robust. And thus warn of a widening surplus in the market into next year.

EU News

European equity close: Strong bounce with the DAX leading the way

Closing changes for the main European bourses:

Stoxx 600 +0.6%
German DAX +1.0%
France CAC +0.6%
UK FTSE 100 +0.6%
Spain IBEX flat
Italy’s FTSE MIB +0.5%

Germany’s economy ministry now sees contracting economy in 2024

Sees -0.2% GDP contraction vs +0.3% previously

The picture continues to dim in Germany and the economy ministry is out with lower forecasts, something that was hinted at earlier this week.

GDP seen -0.2% in 2024 vs +0.3% prior
Expects +1.1% in 2025 vs +1.0% prior
Sees 1.6% growth in 2026
Sees 2024 inflation at 2.2% vs 2.4% prior
Sees 2.0% inflation in 2025 and 1.9% in 2026
Exports expected to contract 0.1% after falling 0.3% last year

German Imports Drop More Than Expected, Exports Rise

German Imports down 3.4%, Exports up 1.3%, Trade Balance beats expectations at 22.5B

German Imports (Aug)

Actual: -3.4%
Expected: -2.5%
Previous: 5.4%

German Exports (MoM)

Actual: 1.3%
Expected: -1.0%
Previous: 1.7%

German Trade Balance

Actual: 22.5B
Expected: 18.9B
Previous: 16.8B

ECB ‘very likely’ to reduce interest rates next week, says Villeroy

European Central Bank likely to lower interest rates, following signals from top official due to struggling economy in the eurozone.

ECB ‘very likely’ to reduce interest rates next week, says Villeroy. European Central Bank policymaker Francois Villeroy de Galhau signaled that the ECB is “very likely” to cut interest rates next week due to weak economic growth.

As head of the French central bank, Villeroy’s comments add weight to growing expectations of policy easing, aimed at supporting the eurozone’s struggling economy.

ECB’s Kazimir: Not as convinced as media reports on October cut

Remarks by ECB policymaker, Peter Kazimir

Not as convinced as media reports on October cut.
We can’t rule out a rate cut at the next meeting.
I’m not currently worried about the ECB undershooting 2% target.
We’ll only get key data in December.
Not convinced that we should decide on the basis of one good inflation figure.
It’s important for us to have certainty that we will not have to revise our steps later.

ECB’s Patsalides says room for rate cut but Middle East implications need assessment

Comments from ECB’s Patsalides

There seems to be room for a rate cut.
But we should discuss all new data as usual.
Middle East implications should be assessed.

Morgan Stanley sees a cascade of European Central Bank rate cuts in the months ahead

25bp rate cuts from the European Central Bank at consecutive meetings

Morgan Stanley are forecasting ECB rate cuts of 25bp at the next four meetings:

October 17, 2024
December 12. 2024
January 30. 2025
March 6, 2025

MS say this’ll take the ECB rate to 2.5% and close to neutral.

Asia-Pacific-World News

Lloyd’s of London warning on potential $14.5 trillion global economic loss

Lloyd’s of London cautions of $14.5 trillion economic hit in 5 years from geopolitical conflict, emphasizing severe risks of escalating tensions.

Global economy could face losses of $14.5 trillion over 5 years from potential geopolitical conflict, according to Lloyd’s of London

Lloyd’s of London warns that a hypothetical geopolitical conflict could cost the global economy $14.5 trillion over a five-year period. The forecast highlights the significant risks posed by escalating geopolitical tensions, with potential widespread economic consequences across various sectors.

China’s new yuan loans likely surged in September as stimulus ramps up

China’s new yuan loans soar to 1.87 trillion yuan in September, doubling August’s total, as the central bank boosts stimulus to revive the economy amidst falling short of last year’s loans. Aggressive monetary measures and upcoming fiscal actions aim to hit the growth target of 5%.

China’s new yuan loans likely surged in September as stimulus ramps up. A Reuters poll suggests that China’s new yuan loans jumped to 1.87 trillion yuan ($264.75 billion) in September, more than doubling August’s total, as the central bank ramps up stimulus to boost the struggling economy.

Despite this increase, the figure falls short of last year’s September loans.

In an effort to meet its growth target of around 5%, China’s government has unveiled its most aggressive monetary stimulus since the pandemic and is expected to announce further fiscal measures this Saturday.

China’s finance ministry briefing set for October 12; fiscal policy adjustments revealed

China’s Finance Ministry to unveil intensified fiscal policy adjustments on October 12, boosting economic recovery and global market sentiment.

China’s Finance Ministry to hold fiscal policy briefing on October 12, detailing intensified adjustment. China’s Finance Ministry will hold a press briefing on October 12th to provide insights into fiscal policy and economic development.

The briefing, scheduled for 10:00 local time, will introduce details on China’s intensified fiscal policy adjustments aimed at boosting economic recovery.

Markets will be closely watching for any additional stimulus measures or fiscal reforms that could influence China’s economic trajectory and global market sentiment.

World Bank says China growth rate will drop next year, doubt over recent stimulus measures

China’s growth rate to drop to 4.3% in 2025, down from a projected 4.8% in 2024

China Growth Set to Slow Further in 2025, World Bank Says

World Bank forecasts China’s GDP growth to drop to 4.3% in 2025 from 4.8% in 2024
2024 estimate revised up 0.3% on stimulus measures, but 2025 projection unchanged
Weak consumer spending, property market woes, aging population cited as challenges
Recent stimulus focused on supply side, may not boost consumer demand
Deeper structural reforms needed for long-term growth, World Bank economist says
Rest of East Asia/Pacific region expected to grow 4.7% in 2024, 4.9% in 2025
Region urged to find domestic growth drivers as China’s economic influence wanes

Key quote: “The question is whether [the stimulus] can actually offset consumer concerns about declining salaries, concerns about declining property incomes and fears about falling ill, growing old, becoming unemployed,” – Aaditya Mattoo, World Bank.

China’s finance ministry to detail fiscal stimulus plans on Saturday

China’s finance ministry announces a 2 trillion yuan fiscal stimulus package to support economic growth and achieve a 5% GDP target for the year.

China’s finance ministry to detail fiscal stimulus plans on Saturday. China’s finance ministry will hold a news conference on Saturday to provide details on fiscal stimulus measures aimed at reviving the faltering economy.

Finance Minister Lan Fo’an will lead the session, where the ministry is expected to outline countercyclical fiscal policies.

Markets have been anticipating these announcements following recent monetary stimulus actions and steps to support the property market.

China plans to issue special bonds worth 2 trillion yuan ($283.43 billion) to help spur growth and meet its target of around 5% GDP growth for the year.

PBOC sets USD/ CNY reference rate for today at 7.0568 (vs. estimate at 7.0565)

PBOC CNY reference rate setting for the trading session ahead.

In open market operations (OMOs):

PBOC injects 61bn yuan via 7-day RR, sets rate at 1.5%

British envoy Lammy embarks on China mission to mend ties

British Foreign Secretary David Lammy to visit China aiming to reset strained relations by addressing Hong Kong, rights abuses, and espionage accusations, seeking a less confrontational approach, focusing on economic ties while acknowledging disagreements.

British Foreign Secretary Lammy to visit China in bid to reset strained ties. Britain’s Foreign Secretary David Lammy is set to visit China next week, aiming to reset relations strained by issues surrounding Hong Kong, rights abuses, and espionage accusations.

The new Labour government seeks to adopt a less confrontational approach toward Beijing, while acknowledging areas of disagreement. Lammy will meet Chinese officials in Beijing and business leaders in Shanghai.

This visit follows recent diplomatic efforts to strengthen economic ties while addressing sensitive political issues between the two nations.

India’s central bank keeps rates steady at 6.50%, shifts to ‘neutral’ stance

India’s central bank, RBI, maintained interest rates at 6.50% but changed stance to ‘neutral,’ hinting at potential rate cuts amid economic slowdown and inflation control focus.

India’s central bank holds rates at 6.50%, shifts stance to ‘neutral,’ signaling potential rate cuts.

The Reserve Bank of India (RBI) kept its key interest rate unchanged at 6.50% but shifted its stance to “neutral,” signaling the possibility of rate cuts in the near future. T

This marks a shift from the previous “withdrawal of accommodation” stance as early signs of economic slowdown begin to surface.

The central bank remains focused on controlling inflation, which has stayed below its 4% target for two consecutive months.

Meanwhile, India’s benchmark bond yields dropped, and the Nifty 50 and Sensex indexes edged higher following the decision.

RBNZ cuts cash rate by 50bp, as widely expected

Reserve Bank of New Zealand October 2024 monetary policy decision

Reserve Bank of New Zealand cash rate dropped to 4.75% from 5.25%,

The 50bp cut was widely expected.

Statement summary points:

New Zealand is now in a position of excess capacity.
Low import prices have assisted disinflation.
The committee assesses annual consumer price inflation within its 1-3% target.
It is appropriate to cut the OCR by 50 bps to achieve and maintain low and stable inflation.
Business investment and consumer spending have been weak, and employment conditions continue to soften.
Geopolitical tensions remain a significant headwind for world economic activity.
New Zealand’s economy is now in a position of excess capacity, encouraging price- and wage-setting to adjust to a low-inflation economy.

More from the RBNZ: price indices signal a continued decline in consumer price inflation

Reserve Bank of New Zealand reasoning

From the minutes to the RBNZ meeting:

The committee confirmed that future changes to the OCR would depend on its evolving assessment of the economy.
The committee agreed that excess capacity has dampened inflation expectations, and price and wage changes are now more consistent with a low-inflation environment.
Members agreed that an OCR of 4.75 percent is still restrictive and leaves monetary policy well-placed to deal with any near-term surprises.
New Zealand’s annual consumer price inflation is assessed to currently be within the committee’s 1 to 3 percent target band and is expected to converge to the target midpoint.
The committee discussed the respective benefits of a 25-basis point versus a 50-basis point cut in the OCR.
The committee agreed that domestic activity is weak.
They agreed that a 50-basis point cut at this time is most consistent with the committee’s mandate of maintaining low and stable inflation.
The committee agreed that the economic environment provided scope to further ease the level of monetary policy restrictiveness.
High-frequency indicators point to continued subdued growth in the near term.
Labour market conditions are expected to ease further.
The committee agreed that monthly price indices signal a continued decline in consumer price inflation in New Zealand.
Financial conditions remain restrictive, and credit demand remains subdued.

RBA Assistant Gov Kent speech on Term Funding Facility

The TFF was one of the unconventional policy tools the RBA used during the COVID-19 pandemic.

Christopher Kent, Assistant Governor (Financial Markets), discusses the review the RBA has just published on the Term Funding Facility (TFF)

The TFF was one of the unconventional policy tools the RBA used during the COVID-19 pandemic.

Headlines via Reuters:

The TFF delivered on its goals set at the start of the pandemic.
Total cost of the TFF to RBA is estimated to have been $9 billion.
A term lending tool of this kind would be worth considering again if warranted by extreme circumstances.
But it would do so only after consideration of a wide range of scenarios and the associated risks.

Japanese machine tool orders decline in September

Japan Machine Tool Orders (YoY) (Sep) show a decrease of -6.5% from the previous -3.5%, impacting the manufacturing sector.

Japan Machine Tool Orders (YoY) (Sep)

Actual: -6.5%
Previous: -3.5%

Japan – Reuters Tankan report for October: Manufacturing sentiment rises from 7 month low

Manufacturing sentiment 7, from 4 in September

The monthly Reuters Tankan survey, a guide to the Bank of Japan’s quarterly tankan survey:

October manufacturers sentiment +7, September was a 7-month low of +4
September non-manufacturers sentiment +20 (falling for the fourth month in a row to its lowest since February 2023) vs +23 in September
January manufacturers index seen at +9, non-manufacturers at +22

Comments from the Reuters report:

“Our clients are growing cautious about raising capital expenditures due to a Chinese economic slowdown,” a machinery maker manager said.
unstable weather and a stronger yen were among reasons cited by non-manufacturers for lower business confidence

Former BOJ official says next rate hike likely in January – PM Isheba won’t stop it

Bank of Japan former executive director in charge of monetary policy Eiji Maeda

Bloomberg on Bank of Japan former executive director in charge of monetary policy Eiji Maeda, who spoke in an interview Tuesday.

In summary:

“January has the highest probability … when the bank releases its latest economic projections.”

BOJ will be watching three critical developments:

the US presidential election,
the trend in service prices this autumn
momentum in the run-up to next year’s annual wage talks

“These factors will be clear gradually so depending on them, the hike could come either in December or March,”

“I don’t think the new government will bind the hands of the BOJ”

Cryptocurrency News

Bitwise: US Government Approves Bitfinex’s Recovery of Hacked Bitcoin Funds

Bitcoin’s price could potentially surge above $80,000 by year-end, contingent on various market factors, according to Bitwise Chief Investment Officer (CIO) Matt Hougan. The recent approval from the US government for Bitfinex to recover 119,754 BTC stolen in a past hack adds to the optimism surrounding Bitcoin’s price trajectory.

Bitcoin Price Outlook: Hougan emphasized that for Bitcoin to reach the $80,000 target, several conditions must be met:

Political stability during the upcoming US elections, avoiding market manipulation.
Additional stimulus measures from China and a potential 50 basis point rate cut from the Federal Reserve.
A market environment with minimal surprises.

Recent sentiments among crypto leaders suggest that a Republican victory could boost Bitcoin’s momentum, while a Democratic win may suppress it, with Bernstein analysts highlighting this dichotomy.

Key Considerations: Hougan pointed out that Bitcoin’s success doesn’t depend on politicians but rather on them not interfering with market dynamics. He reiterated the importance of additional monetary easing and Chinese fiscal stimulus as potential catalysts for price growth.

However, Hougan cautioned that the market is susceptible to unexpected events, such as hacks or legal challenges, which could derail momentum. The US government’s recent filing indicates that Bitfinex is likely the only victim eligible for restitution from the recovered BTC, which, if confirmed, could inject substantial liquidity into the market.

The tokens were originally stolen in a 2016 hack, valued at $71 million at the time, but are now worth approximately $7.4 billion. Following the incident, Bitfinex compensated affected users through BFX tokens and has since managed to recover around 80% of the lost funds. Recent legal actions have also targeted individuals linked to laundering the stolen Bitcoin.

The developments surrounding Bitfinex and the broader market will be closely watched as traders anticipate how these factors will influence Bitcoin’s price in the coming months.

Crypto Today: Bitcoin, Ethereum, XRP hold steady as market braces for potential supply overhang from Silk Road and Bitfinex BTC

Bitcoin stays above $62,000 despite possible supply risks from seized funds. Ethereum consolidates near $2,400, while XRP hovers below resistance.

Bitcoin, Ethereum, and XRP Updates
Bitcoin (BTC) is holding steady around $62,120, even after $58.2 million in BTC ETF outflows. Concerns are rising that the US government’s potential sale of 69,730 BTC seized from Silk Road could pressure the market in the coming months.

Ethereum (ETH) is down 0.5%, trading just above $2,400 after $8.1 million in ETF outflows. ETH faces resistance at $2,490.

Ripple’s XRP is consolidating around $0.530, with $0.544 acting as resistance. A failure to break higher may lead XRP toward $0.500.

Market Updates
Ark Invest purchased 12,994 Coinbase (COIN) shares for $2.2 million in its Fintech Innovation ETF (ARKF) while selling $36.4 million in Robinhood (HOOD) stock across three ETFs. This adjustment aligns with Ark’s strategy of keeping no single holding over 10% of the portfolio.

The US government may transfer 119,754 BTC seized from Bitfinex after a 2016 hack, potentially creating a market overhang. If these funds are released, it could echo Mt. Gox creditors’ repayments and similar past events, contributing to a surge in selling pressure.

Industry Updates
HBO’s documentary identified Bitcoin Core developer Peter Todd as Satoshi Nakamuto, a claim Todd and the crypto community have widely disputed.
Tron now hosts 75% of all USDT addresses due to its faster and cheaper transactions, further distancing itself from Ethereum.

Bitcoin Price Prediction
Trader Peter Brandt forecasts Bitcoin could reach $135,000 in August/September 2025, following the halving cycle trend. He added that Bitcoin’s price consolidation since March is part of the ongoing uptrend but noted a price close below $48,000 would invalidate his bullish outlook.

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Round up of today’s market news

ByBilals Tech