Headlines:
- Major central banks take centre stage this week but will there be any surprises?
- Oil retreats as Trump refrains from striking Iran over the weekend; risk of attacks keeps the market supported
- Chart of the day: Gold price tests $4,000 support, is a deeper correction looming?
- Gold could rebound in the near-term as growth and US strikes fears subside; eyes on the FOMC next
- European stock market open: Stocks push higher as French bond market tensions ease
- Germany Ifo business confidence improves in October as expectations surprise higher
- Heads up: European daylight saving time has ended, here’s what traders need to know
Markets:
- USD leads, JPY lags on the day
- WTI crude oil down 2.6% to $100.75
- Gold up 0.6% to $4,019
- 10-year Treasury yields flat at 4.995%
- European stocks climb; S&P 500 futures up 0.3%
Markets are enjoying a steadier start to the new week, with oil prices coming off the boil in helping to provide some calmer tones elsewhere.
The main focus this week is on major central bank decisions, with the RBNZ, BOC, Fed, ECB, and BOJ all on the agenda. And with month-end shenanigans also potentially in the picture, traders and investors are very much keeping to their own for now.
Oil prices are sitting lower after as US president Trump says he is weighing up a deal with Iran – again. We’ve seen this story one too many a time but the slight array of hope is at least taking the upward pressure off from last Friday. WTI crude is down 2.6% to $100.75 but still at elevated levels nonetheless.
Meanwhile, Treasury yields are not up to much with 10-year yields still hovering near 5%. So, that’s not injecting much volatility to broader markets. Instead, it is over in Europe is where the bond market looks more interesting. After Moody’s retained France’s Aa3 rating at the end of last week, French bond yields are pushing lower with the France-Germany 10-year yield spread also dropping to 160 bps – down from a high of 176 bps last week.
As such, that is buying some reprieve for European stocks today with France’s CAC 40 index up 0.9%. The overall risk mood is also holding up better today as US futures are looking to bounce back too. Tech shares are keeping higher in pre-market with Nasdaq futures up 0.5%, although investors will be eyeing key earnings from the likes of Microsoft, Alphabet, and Amazon in the days ahead.
In other markets, the dollar is lightly changed on the day with traders having little to work with while gold is keeping a defense of the $4,000 mark for now. On the latter, buyers are managing to keep a bounce near the figure level but the pressure is still on after the precious metal dipped below the $4,000 level for the first time since July on Friday.
Looking ahead, the market focus will continue to gear towards the major central bank decisions this week. After so much focus on inflation data and headlines, it is finally up to central banks to have their say.
This article was written by Justin Low at investinglive.com.