US Stocks Recover as Trade Tensions Ease – Nasdaq up 2.2%
US stock indices recovered in trading yesterday as trade tensions eased after both the US and China indicated that trade negotiations will remain ongoing. The Dow jumped 1.29% to 46,067, the S&P added 1.56% to 6,655, and the Nasdaq leapt 2.21% to 22,694. Bond markets were closed for the Columbus Day holiday, but yields are expected to bounce tomorrow. The dollar did bounce back to recover some of its losses from Friday, the DXY up 0.30% to 99.28 by the close. Oil prices also recovered some, but by no means all, of Friday’s lost ground, with Brent up 1.20% to $63.48 and WTI up 1.26% to $59.64 a barrel. Gold was once again a standout mover as it powered through $4,100 to close at yet another record high, up 2.29% to $4,110.27 an ounce.
Gold Bulls Back in Charge Again
Gold resumed its relentless move higher yesterday as it powered over 2% further north to smash through its latest big-figure barrier like a hot knife through butter. The last couple of days of last week had seen some more ‘normal’ trading for gold as first a big risk-on move had seen it sink hard before trade tensions escalated into the weekend and it rallied again in line with other market moves. However, yesterday the relentless buying that has been a feature of the last six weeks since it broke its previous record level recommenced, and it far outstripped moves in other financial products. Gold has now gained over 56% this year, and various theories are still being bandied across markets as to the reason behind the move. They seem to be changing on a daily basis, but traders cannot ignore the trend, and most are still looking to jump on the back of it, with any dip still well supported.
Central Banks in Focus on the Calendar Today
Geopolitics looks set to continue to dominate market sentiment into today’s trading sessions; however, the economic calendar does have a distinctly central-bank feel to it, with several updates due out across the day. The initial focus in the Asian session will be on Australian markets, with the Reserve Bank of Australia’s Monetary Policy Meeting Minutes due out early in the day, before focus moves north as Japanese markets reopen after a long weekend. There is some key data due out of the UK early in the London session, with employment numbers scheduled for release. The Claimant Count is expected to increase by 10k m/m, with the unemployment rate remaining steady at 4.7%. Later in the day, during the New York session, the focus moves to Washington, D.C., where the great and good of the central banking world are gathering for a couple of days. The highlights today will be updates from Fed Chair Jerome Powell and Bank of England Governor Andrew Bailey.
