- Equity markets advance
- The two-day meeting of the Federal Reserve begins.
- Treasury bond yields fall sharply.
- Metals and oil on the rise, cryptocurrencies rise but with less rhythm.
Markets in Europe rise more than 1% and Wall Street futures trade in the green, on the day the Fed meeting kicks off. The dollar falls sharply, while metals accelerate the rebound. Treasury bond yields are off Monday’s peaks.
Wall Street recovers after Monday’s fall
In Europe, the FTSE 100 is up 1.40%, while the DAX is up 1.28% and the CAC 40 is up 1.59%. ANDThe S&P 500 fell 0.75% on Monday, while futures were up 0.98% in Tuesday’s preview.; those of the Nasdaq climb 1.21%.
The region of China, Zhengzhou will temporarily lift COVID-19 controls in low-risk areas, gradually returning to normal life, media reported. The Caixin manufacturing PMI showed an improvement in October. Both factors help the best mood in the markets.
The dollar it is falling throughout the market and especially against the yen, although this time without suspicion in an intervention. The yen went from being the weakest in the G10 on Monday, to being one of the best on Tuesday. USD/JPY loses around 150 pips and trades around 147.00. The decline in Treasury bond yields is a key factor. The 10-year benchmark is back below 4.00%. This occurs on the day of the beginning of the two-day meeting of the Federal Reserve.
I know expects the Fed to raise the rate by 75 basis points and there is growing expectation that it will signal softer gains going forward. The latter is behind part of the recent weakness of the dollar and favors the rise in the price of shares in the world.
On the data side, US manufacturing numbers will be out on Tuesday with the ISM and final PMI reading, plus the jobs advisories report. Wednesday will be the ADP and Friday non-farm payrolls.
In the United Kingdom, Prime Minister Rishi Sunak and the finance authorities said that it is inevitable that the British will pay more taxes; although they ruled out, they increased taxes on income and value added. GBP/USD is back above 1.1500, while EUR/GBP is flat unchanged for the day around 0.8610.
The Reserve Bank of Australia, as expected, raised the benchmark interest rate by 25 basis points to 2.85%. I point out more adjustment ahead. It is one of the first central banks to begin to focus on the risks of recession despite high inflation. AUD/USD is rising and trading at 0.6445, supported by dollar weakness as the aussie is among the weakest. AUD/NZD falls and trades around 1.0960, 4-month low zone. New Zealand’s employment report for the third quarter will be released on Wednesday.
Commodities are having a great day between the advance in the equity markets and the weakness of the dollar. The Prayed raises more than $20 and is over $1650, while the silver climbs more than 4% and approaches $20.00. The cryptocurrencies they also rise, although in a more limited way. Bitcoin is located in the area of $20,500 and Ethereum at $1,590. Oil prices rise more than 1%.
Johnson & Johnson agreed to buy Abiomed (a company that produces medical products) for 16.6 billion dollars, the WSJ reported. in the previous jnj falls 1.18%. Goodyear falls nearly 8% after reporting lower-than-expected earnings. Among the companies that will present results on Tuesday are PfizerEli Libby, Airbnb, Uber, ToyotaKKR, Electronic ArtsCaesars Entertainment and Prudential.
Technical levels
Source: Fx Street
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