A busy trading calendar meant that major assets were exposed to asset-specific catalysts and new market themes!
What headlines caught investors’ attention and how did your favorite asset trade?
Let’s analyze the major market movements on Thursday:
Titles:
- Japanese trade balance It shifted to a deficit of JPY294.24 billion in September 2024, compared to a surplus of JPY60.56 billion in the same month of the previous year, and exports unexpectedly fell by 1.7%.
- The Australian dollar rose sharply as the Australian economy added 64.1K jobs in September
- Switzerland’s trade surplus Wide from CHF 4.74 billion Upgraded to CHF 4.92 billion (expected CHF 4.85 billion)
- Eurozone headline consumer price index Confirmed at 2.7% as expected for September, core CPI fell from 1.8% to 1.7%
- The European Central Bank cuts interest rates in October, signaling openness to further adjustments
- Major retail sales in the United States rose 0.4% m/m in September (0.3% expected, 0.1% previously expected); Core retail sales rise 0.5% m/m (0.1% expected, previous reading upgraded to 0.2%)
- Initial unemployment claims in the United States At 241,000 as expected, and 260,000 previously for the week ending October 10
- Philadelphia Fed Manufacturing Index It rose from 1.7 to 10.3 versus 4.2 expected in October
- American industrial production Slowed by 0.3% vs. expected 0.1% decline month-on-month in September, Capacity utilization rate rose by 77.5% vs. 77.9% expected to indicate downward pressure on wages
- Environmental impact assessment of crude oil reserves Down 2.2 million barrels (+1.8 million expected, +5.8 million previous)
- Japan’s national core consumer price index Decreased from 2.8% year-on-year to 2.4% versus 2.3% expected in September
Broad market price movement:
Dollar Index, Gold, S&P 500, Oil, 10-Year US Yields, Bitcoin Overlay Chart by TradingView
With no new catalysts to shake things up and major events such as the ECB decision and US retail sales looming, major assets remained on course during the Asian and early European sessions.
The most prominent of these currencies were Bitcoin (BTC/USD) and US crude oil. Bitcoin continued its decline after being rejected near $68,000, while oil was hit after a disappointing Chinese stimulus update regarding housing.
Volatility rose once the European Central Bank (ECB) cut interest rates, as expected, and hinted at more cuts to come. In the US, retail sales came in stronger than expected, along with better than expected weekly jobless claims and a Philadelphia Fed manufacturing PMI, which calmed hopes for strong interest rate cuts from the Fed.
The 10-year US Treasury bond yield rose to 4.09%, gold hit a new record high at $2,692, and the dollar index rose to 103.75. US stocks rose, with chipmaker TSMC reporting strong earnings, pushing the Dow Jones to a fourth record close in five sessions. Meanwhile, US crude ended the day near its lows at $70.11, and Bitcoin managed to bounce back to $67,400.
Forex market behavior: US dollar against major currencies:
Overlay of the US dollar against major currencies Chart by TradingView
Aside from its weakness against the Australian dollar after the Australian jobs report, the US dollar was trading in ranges during the Asian session.
The US dollar started to decline ahead of the ECB decision and US data releases, but the ECB’s “cautious easing” event and positive US reports all helped push the dollar higher.
The dollar reversed some of its post-report gains against “risk” currencies such as the euro, British pound, Australian dollar, New Zealand dollar and Canadian dollar, but also extended gains against safe havens the Swiss franc and Japanese yen by the end of the US session.
Potential catalysts coming on the economic calendar:
- UK retail sales at 6:00 AM GMT
- Eurozone Current Account at 8:00 AM GMT
- US building and residential permits begin at 12:30 PM GMT
- Federal Open Market Committee member Christopher Waller will speak at 4:10 PM GMT
The data calendar gets less crowded today as we only have middle-class data from the US after the UK published its latest retail figures.
So, with a few potential catalysts on the agenda, look for a continuation or retreat from yesterday’s themes and positioning ahead of next week’s events. Good luck and good trading!
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