General Daily Market Summary – 30 September 2024

Monday was a mixed bag for most asset classes, before dollar pairs managed to find clear direction during Fed chief Powell’s speech.

Commodities were on shaky ground after China released lackluster PMI numbers, but global shares managed to pare losses.

Here are the other updates you should know about!

Titles:

• Sunday, The PBOC announced that it will extend the support measures for property developers until the end of 2026 and advises banks to lower mortgage rates on existing home loans before 31 October
• Geopolitical tensions erupt as three Palestinian leaders killed in Israeli strike in Beirut
• Japanese preliminary industrial production for August: -3.3% m/m (-0.5% est., previous reading increased from 2.8% to 3.1%
• August Japanese retail sales: +2.8% y/y (2.6% y/y est., 2.7% y/y previously)
• Japan housing starts for August: -5.1% y/y (-3.3% y/y estimated, -0.2% y/y previously)
• New Zealand ANZ business confidence index rose from 50.6 to 60.9 in September
• Official Chinese Manufacturing PMI improved from 49.1 to 49.8 in September (forecast 49.4); Non-manufacturing PMI fell from 50.3 to 50.1 (forecast 50.4)
• China’s Caixin Manufacturing PMI down from 50.4 to 49.3 in September (forecast 50.5); Non-manufacturing PMI down from 51.6 to 50.3 (forecast 51.6)
• German import prices change for August 2024: -0.4% m/m (forecast -0.2% m/m; -0.4% m/m previously)
• German preliminary CPI read for September 2024: 1.6% y/y vs. 1.9% y/y previously
• Switzerland’s KOF leading economic indicator for September: 105.5 (forecast 102.5; previously 105.0)
• During the hearing of the European Parliament in Brussels, ECB President Lagarde hinted at a potential rate cut in October
• Chicago PMI in September: 46.6 (previously 46.1, 46.1 consensus)
• During a speech at the National Association for Business Economics, Fed Chairman Powell signaled further cuts but stressed they are “not on any set course”
• New Zealand’s NZIER business confidence index rose from -44 to -1 in September

Broad Market Price Action:

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

Most asset classes started the day on a cool note, with the exception of crude oil which tanked early on, then continued to climb on geopolitical tensions during the Asian trading session. As it turned out, Israel launched strikes in Beirut and began its ground invasion of Lebanon, rekindling concerns about the region’s oil production.

Bitcoin woke up on the wrong side of the bed and continued its downward trajectory for the rest of the day, dropping from the $66,000 level to the $63,500 area. Gold traders also appeared to be in a sour mood throughout the day as the precious metal closed nearly 1% lower, likely due to largely subdued PMI readings from China.

On the other hand, Treasury yields moved into the green around the start of the London session and received an additional boost from Fed chief Powell, who suggested in his testimony that they are in no rush to cut rates, but will do everything what is necessary to maintain. stable economy.

Meanwhile, US stocks initially fell as investors were disappointed to learn that further rate cuts were not set in stone, but some risk flows eventually returned as megacaps such as Apple, Microsoft and Alphabet posted gains decent.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The major pairs got off to a mixed start, before the US dollar caught some safe-haven flows when China posted weaker-than-expected PMI numbers. Losses for commodity currencies were limited, however, as the Chinese government and central bank have already rolled out massive stimulus packages aimed at boosting the economy.

USD/JPY initially rallied on a weaker-than-expected Japanese industrial production report and some profits following the election of new Japanese Prime Minister Shigeru Ishiba last Friday. However, the yen was able to regain ground thanks to a strong Nikkei performance.

The tide turned, however, at the start of the session in London as the US dollar regained ground against the Aussie, kiwi, yen and franc, while remaining on shaky ground against the euro and pound sterling. Weaker-than-expected German preliminary CPI barely dampened spirits of the single currency as traders focused on sticky services inflation.

Another round of mixed price action ensued, before the US dollar drew a strong bid from Powell’s not-so-proof testimony. After all, he noted that the US economy remains strong, but that the Fed only wanted to stay ahead of the curve when it came to minimizing labor market risks, dashing hopes of more aggressive easing moves in the near term.

Future potential catalysts for the economic calendar:

• Chinese banks are closed for the holiday
• Swiss retail sales at 6:30 GMT
• CPI flash estimates for the euro area at 9:00 GMT
• US ISM Manufacturing PMI at 14:00 GMT
• jobs available in US JOLTS at 14:00 GMT
• The New Zealand GDT Dairy Auction is coming up
• FOMC members Barkin, Bostic and Collins will participate in a discussion at 22:15 GMT

We’ve got a handful of top budget builds that could shake things up in the market today!

These include the flash Eurozone headline and core CPI readings for September, which could very well shape ECB policy expectations and influence longer-term Euro trends. After that, watch for the US ISM manufacturing PMI report and the JOLTS jobs report, both of which are likely to influence NFP positioning and overall market sentiment.

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