This is what you need to know to trade today Tuesday, October 5:
Markets have been rocked by rising energy prices and massive Facebook downtime. The safe haven dollar is on the rise and now awaits the ISM services PMI. Uncertainty about the US debt ceiling and Chinese issues is also in focus. Shiba stands out among cryptocurrencies and oil remains of interest.
Risk aversion: Oil prices joined the rise in commodity prices after OPEC + members decided to keep increasing production by 400,000 barrels per day and no more. WTI crude has hit $ 78, the highest level since 2014. High costs for natural gas, concerns about inflation from other materials, and shipping costs can jeopardize the recovery and drive borrowing costs higher.
Markets fell in response to inflation fears and also to massive blackout on Facebook, which also affected Instagram and WhatsApp. The downfall of these ubiquitous services comes as the firm faces scrutiny over accusations that it prioritized profit over security.
Dollar on the rise: After pulling back on Monday, the greenback has been on the rise on Tuesday, pushing the EUR/USD below 1.16 and at GBP/USD below 1.36. The price of gold is also off the highs, with XAU / USD changing hands below $ 1,760.
The AUD/USD it is trading around 0.7250, falling on the strength of the greenback and after the Reserve Bank of Australia left its policy unchanged, as expected. The RBA reiterated its stance that borrowing costs are unlikely to rise until 2024, but its outlook remains optimistic.
Debt ceiling: US President Joe Biden has warned that the United States could default on its debt within two weeks if Republicans do not cooperate in raising or suspending the debt ceiling. Democrats are still scrambling to find a compromise between left and centrist factions on two spending bills.
China: Evergrande, China’s second-largest real estate developer, continues to struggle with its debt payments. Another construction company, Fantasia Holdings Group Co, also lost a dollar bond payment, adding to the pessimistic sentiment.
UK petrol stations are reportedly breathing with some relief after drivers queued long to fill their cars for fear of a shortage. The British Army continues to help deliver gasoline to stations. On another Brexit-related issue, the EU and the UK remain at odds on the Northern Ireland protocol.
Looking ahead, the Purchasing Managers Index Services (PMI) of the United States will show somewhat slower growth in September. This indicator serves as a clue for Friday’s Non-Farm Payrolls. However, the component of prices paid will be observed amid growing concerns on the subject.
cryptocurrencies: Shiba Inu has been standing out with double-digit earnings after Tesla founder Elon Musk tweeted a photo of the critic’s dog. Bitcoin is trading at the upper end of the range around $ 49,000, Ethereum is hovering above $ 3,300 and Ada around $ 2.21.
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