Asia & European Sessions:
- Wall Street recovered slightly from Friday’s dip. Dip buying got the ball rolling and short covering has added to the bullish momentum.
- Expectations for a soft, rather than hard landing, with the FOMC expected to cut rates by only -25 bps rather than -50 bps have supported as well. The advent of the Treasury’s $119 bln in auctions, along with a heavy corporate calendar also weighed.
- Nvidia and Tesla have paced the strength in big tech. The Dow advanced 1.2%, with the S&P500 and NASDAQ climbing 1.16%. Strength was broadbased. Five of the 11 S&P 500 sectors posted gains of better than 1%, led by consumer discretionary and IT.
- Sights are on today’s presidential debate and then CPI Wednesday.
- European stock markets are narrowly mixed in early trade, with the FTSE 100 underperforming, after a drop in the ILO unemployment rate. The overall labor market report was not as clear-cut, but the data will add to the arguments against back to back cuts and another move from the BoE this month.
- German HICP inflation was confirmed at 2.0% y/y. The data will add to the arguments in favor of a cautious cut from the ECB on Thursday.
Financial Markets Performance:
- The USDindex found its footing and rose to 101.68 from an overnight low of 101.14.
- The USDJPY lifted to 143.21. The Yen corrected, which helped to limit the slide in the Nikkei.
- Oil returned to $67.60 after Monday’s gain, driven by the return of a risk-on tone to wider markets.
- Gold edged up 0.36% to $2506.38 ahead of US Inflation tomorrow.
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Andria Pichidi
Market Analyst
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