Headlines:
Stocks turn lower as risk appetite begins to look wearyChina commerce ministry confirms suspension of some rare earth export control measuresChina reportedly begins easing rare earth export curbs but unlikely to fulfill US promiseChina gold buying spree continues in OctoberFed vice chair Jefferson says should proceed slowly with further rate cutsGermany September trade balance €15.3 billion vs €16.8 billion expectedFrance September trade balance -€6.58 billion vs -€5.53 billion priorUK October Halifax house prices +0.6% vs +0.1% m/m expected
Markets:
EUR leads, NZD lags on the dayEuropean equities lower; S&P 500 futures down 0.3%US 10-year yields up 0.4 bps to 4.096%Gold up 0.6% to $4,002.04WTI crude oil up 0.9% to $60.05Bitcoin down 1.0% to $100,083
The session started off with a steadier market mood but slowly turned sour as we transition and gear up towards North America trading in the final stretch of the week.
It’s once again a case of de-risking with equities turning lower while Bitcoin is nudging back towards a test of the $100,000 mark. S&P 500 futures were up around 0.3% early in European trading but have slumped lower to be down 0.3% instead. That’s also seeing European indices drop lower after a positive start, with the DAX down 0.7% and CAC 40 down 0.4% currently. The pressure is back on.
As mentioned earlier, I’m not one to be keen to attribute the negative mood this week to the US shutdown but perhaps it’s also best to acknowledge that it is playing a role at least in terms of liquidity/funding impact as noted here.
With risk trades softening, we are seeing the dollar also nudge a little lower on the day once more. USD/JPY is flat around 153.08 but well off earlier highs near 153.50. Meanwhile, EUR/USD is marginally higher at 1.1562 while USD/CHF is down 0.1% to 0.8055 on the day.
The commodity currencies are at least holding their own for now after it having been a bad week in general. That being said, it’s still early in the day and things can turn sour again when Wall Street enters the fray later.
In the commodities space, gold continues to be caught in two minds this week amid the risk push and pull but is settling a little higher today in another attempt to reclaim a push above $4,000.
As risk sentiment remains the key driver ahead of the weekend, will dip buyers try to make a stand or is this going to mark the start of a deeper run lower in the first half of November trading?
This article was written by Justin Low at investinglive.com.