General Daily Market Recap – October 3, 2024

Caution ahead of Friday’s US NFP release may have kept overall volatility in check, but asset-specific catalysts still brought some measure to major markets.

So which headlines stole the spotlight on Thursday?

Let’s break it down below:

Titles:

• BOJ member Asahi Noguchi favors monetary policy adjustment “at a slow pace” and a pause to assess the impact of the first rate hike before raising rates again
• Switzerland’s inflation fell 0.3% m/m in September (-0.1% expected, 0.0% previously) on cheaper petrol, accommodation and holidays. Annually, prices rose 0.8%, the slowest increase since July 2021
• HCOB Germany final services PMI confirmed at 50.6 as expected in September; “Perceived prices also rose more slowly than in August;” Employment fell at fastest pace in more than four years”
• HCOB PMI final services in the euro area adjusted higher from 50.5 to 51.4 in September; “Exit fees have increased only modestly;” “Job creation was slightly faster than in August”
• S&P Global UK Final Services PMI revised lower from 52.8 to 52.4 in September
• BOE Governor Bailey said the central bank could be “a bit more aggressive” in cutting interest rates if inflation continues to improve
• Industrial production prices in the euro area rose 0.6% m/m in August (0.4% expected, July reading revised lower from 0.8% to 0.7%)
• Job cuts at Challenger in the US fell from 75,891 to 72,821 in September and noted that most planned hiring is from seasonal employers
• US weekly initial jobless claims week ending September 28: 225K (estimated 222K, previously 219K)
• US S&P Global final services PMI it was revised lower from 55.4 to 55.2 in September
• American POTUS Biden said the US was discussing with Israel the possibility of striking Iran’s oil infrastructure
• US ISM Services PMI rose from 51.5 to 54.9 in September, but the employment index contracted for the first time in three months
• US factory orders fell 0.2% m/m (0.1% est.) in August after rising 4.9% in July

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, US 10-Year Yield, Bitcoin Overlay Chart by TradingView

A lack of top data releases kept major assets in ranges earlier in the day.

Volatility rose as the European session got under way, with US dollar alternatives such as gold, crude oil, bitcoin and US stock futures falling. Rising tensions in the Middle East, along with traders likely to have gained ahead of Friday’s US NFP report, could have driven the moves.

During the US session, the 10-year Treasury yield gained an upbeat boost as jobs data fueled expectations of further Fed rate cuts. Crude also rose after President Biden mentioned that Israel could target Iran’s oil infrastructure.

Gold returned to the news, revising daily highs before closing at $2,655, while WTI crude rebounded from $70.60 to $73.80. The 10-year Treasury yield capped the day near 3.85%, bitcoin held below $61,000 and U.S. stock indexes ended slightly lower than their opening levels.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The US dollar opened strongly against the yen, Swiss franc and the Australian and New Zealand dollars, likely due to weak data from Australia and New Zealand and trader prices from Tuesday’s stronger-than-expected ADP report.

USD/JPY initially gained on dovish BOJ speculation, but lost momentum after BOJ member Noguchi clarified that policy adjustments are still possible, albeit at a slower pace.

Sterling was later hit after BOE Governor Bailey hinted at the possibility of “more aggressive” rate cuts in a newspaper interview. Meanwhile, a weaker-than-expected Swiss CPI report raised the odds of an NBS rate cut, weighing on the franc.

The US dollar held on to gains against the AUD, NZD and GBP before US labor market data sparked choppy price action. Finally, the dollar pushed to highs, supported by a stronger-than-expected ISM services PMI and concerns that Israel may target Iran’s oil infrastructure.

Future potential catalysts for the economic calendar:

• Swiss unemployment rate at 5:45 GMT
• French Industrial Production at 6:45 GMT
• BOE member Huw Pill will give a speech at 7:55 GMT
• UK Construction PMI at 8:30 GMT
• US NFP reports at 12:30 pm GMT
• FOMC member John Williams will deliver a speech at 13:00 GMT
• Canada IVEY PMI at 2:00 pm GMT

It’s NFP Friday, wrong! Price action is likely to be muted ahead of the release, but we could see areas of volatility when Switzerland drops its unemployment rate and BOE Chief Economist Huw Pill gives a speech in London.

In the US, labor market numbers are expected to fall in September, which could fuel the Fed’s aggressive rate cut expectations. Make sure you read us Event guide for the US NFP report if you change the release!

Don’t forget to check out our new Forex Correlation Calculator!