General Daily Market Recap – October 2, 2024

Data flow has been relatively light in recent trading sessions, but that hasn’t stopped a few asset classes from making big moves.

The US dollar and Treasury yields got a bit of a boost from another upbeat jobs indicator, while energy commodities took cues from stock data.

Check out these market updates!

Titles:

• New Zealand’s GDT auction saw a 1.2% gain in dairy prices (previously 0.8%)
• Japanese consumer confidence improved in September from 36.7 to 36.9 (forecast 37.1)
• The new Prime Minister of Japan, Shigeru Ishiba said the economy is not yet ready for further interest rate hikes, following a meeting with BOJ chief Ueda
• Unemployment change in Spain in September rose by 3.2k (12.1k estimate, 21.9k previously)
• The eurozone unemployment rate was unchanged at 6.4% in August, in line with expectations
• US ADP Non-Farm Employment Change in September: 143K (126K forecast, 103K previous)
• EIA Crude Oil Stocks increased by 3.9 million barrels (-1.5 million expected, -4.5 million previously)
• FOMC official Barkin expressed support for a 0.50% rate cut in September because borrowing costs have not kept pace with inflation and unemployment is close to its sustainable level.

Broad Market Price Action:

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

Market correlations appeared to be breaking down in earlier trading sessions as the lack of headline events saw asset classes move to their own individual catalysts.

Crude oil started on a strong note and continued to bet on the worsening geopolitical conflict in the Middle East, which raised concerns about global supply, during the trading sessions in Asia and London. However, oil bulls hit a wall when the EIA report revealed a surprise build of 3.9 million barrels in inventories instead of the expected 1.5 million barrel draw, suggesting weaker demand conditions.

US stocks still appeared locked in risk-off flows for most of the day as investors were likely worried about the potential repercussions of geopolitical tensions on the world economy. However, the S&P 500, Nasdaq and Dow managed to post small gains thanks to gains in defense and energy stocks.

BTC/USD bounced back and forth between resistance around $61,600 and support near $60,500, but ended the day in the red due to dollar strength. However, US bond yields erased some of their earlier gains during the New York session shortly after the ADP numbers were printed.

Currency Market Behavior: US Dollar vs. Majors:

USD chart overlay against major currencies by TradingView

The dollar pair got off to a slow start before some of its major counterparts broke in different directions.

The yen was on shaky ground after Japan’s new prime minister met with BOJ governor Ueda and said the economy was not yet ready for further rate hikes, sending USD/JPY higher for most of of the day and close almost 2% in the green.

Meanwhile, the Aussie and Kiwi made some gains against the US currency during Asian market hours, but ultimately joined the other majors in consolidating during the London session.

USD/CHF also broke away from the pack and started to climb ahead of the ADP jobs report, which then led to some further gains for the Greenback when the numbers turned out to be mostly better than expected .

Future potential catalysts for the economic calendar:

• Chinese banks still closed for holiday
• Swiss CPI at 6:30 GMT
• PPI from the euro area at 9:00 GMT
• Job cuts at Challenger in the US at 11:30 GMT
• Initial US Jobless Claims at 12:30 GMT
• US ISM Services PMI at 14:00 GMT
• US factory orders at 14:00 GMT
• Speech by FOMC member Schmid at 14:00 GMT
• Speech by FOMC member Bostic at 14:40 GMT

Franc traders are probably preparing for the launch Swiss CPI figure for Septemberas this could determine whether or not the NBS could go ahead with another rate cut at their next meeting.

After that, we have a few more pieces of the US jobs puzzle going forward Challenger Job Cuts Report and PMI ISM Services could still shape NFP expectations and thus dollar trends.

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