Wall Street closed slightly higher amid strength in big tech. Tesla climbed 10% after Morgan Stanley boosted its outlook on the stock based on expectations on the impacts of the “Dojo” computer. Treasuries posted small losses amid a lack of buyers. Bloomberg suggested it was the smallest range on the 10-year in over 2 years. The 10-year was up 2.5 bps to 4.295%. It was generally contained by the 4.30% level as well as the 4.34% cycle peak from August 21, the highest since late 2007. Today, European futures are higher, US futures slightly lower, as markets wait for US inflation numbers.
This morning: UK wage growth higher than expected – a bit of a negative surprise for the BoE. The ILO unemployment rate was unchanged, jobless claims nudged up 0.9K in the more up to date August report and the July reading was revised down. Mixed signals for the BoE about the overall situation in the labour market, but it seems payroll growth is slowing, which ties in with survey data from the PMI reports. Despite this, wage growth remains uncomfortably higher and the data would back at least one more rate hike from the BoE this month. BoE’s Mann warns against early end to tightening cycle.
- FX – USDIndex lost a little ground, albeit after 8 straight weeks of gains, currently at its lows at 104.63 from 104.37. EURUSD drifted to 1.0725 from 1.0768 and GBPUSD higher after the data at 1.2529. USDJPY higher at 146.85 but Yen holds yesterday’s gains.
- Stocks – The US100 rallied 1.14% on the back of a surge in big tech. The US500 was 0.67% and the US30 was 0.25% firmer. JPN225 also jumped nearly 1%, but elsewhere across Asia the move higher was muted and China bourses traded narrowly mixed, with the CSI 300 down -0.1% and the Hang Seng rising a mere 0.1%. European futures are higher.
- Disney and Charter gained. Both stocks climbed after reports of a deal to restore channels including ESPN and ABC to the cable operator’s subscribers. Warner Bros. Discovery also rose.
- Nvidia fell. The chipmaker edged lower, extending a rocky September. Advanced Micro Devices also declined. J.M. Smucker shares fell after the snack giant agreed to buy Twinkies owner Hostess.
- Commodities – USOil higher as attention shifts to outlooks from OPEC & US.
- Bitcoin rose after dropping to the lowest since June on Monday.
Today: The Apple product event, German ZEW Economic Sentiment. OPEC and US EIA will both publish monthly market reports later.
Key Movers: BTCUSD rallied by +2.77% today.
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Andria Pichidi
Market Analyst
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