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Oil up near $90 as OPEC+ considers output cut

Fortunes are built during the down market and collected in the upmarket.” — Jason Calacanis

 

 

 HEADLINES

 

 

  • Sterling climbs as dollar slips in wake of Bank of England intervention
  • Gold loses luster as dollar resumes rally, rate-hike fears mount
  • Oil up near $90 as OPEC+ considers output cut
  • Dow plunges 600 points as Apple leads broad market sell-off
  • 10-year yield rises, reversing some of Wednesday’s major losses
  • EUR/USD: Unlikely to hold above 0.95 – SocGen
  • GBPJPY Near Term: Upside favored

 

Sterling climbs as dollar slips in wake of Bank of England intervention

 

 

The pound reversed losses and climbed more than 1% on Thursday as the dollar slipped and investors analysed the Bank of England’s dramatic intervention in the bond market.

Sterling had dropped in morning trading in London but later rallied to stand 1.3% higher on the day at $1.1026 in the afternoon session. It rose against most major currencies, with the euro last down 1.01% at 88.48 pence.

The pound crashed to a record low against the dollar of $1.0327 on Monday after new finance minister Kwasi Kwarteng unveiled plans to cut taxes, particularly for the rich, and raise borrowing.

 

 

COMMODITIES

 

 

Gold loses luster as dollar resumes rally, rate-hike fears mount

 

 

Gold prices slipped on Thursday as a firmer dollar took the sheen of the greenback-priced metal, with mounting concerns over the U.S. Federal Reserve’s aggressive monetary policy and impending rate hikes denting sentiment further.

Spot gold fell 0.06% to $1,658.39 per ounce, having marked its best day since March on Wednesday.

U.S. gold futures fell 0.17% to $1,667.2

 

 

ENERGY

 

 

Oil up near $90 as OPEC+ considers output cut

 

 

Oil prices rose on Thursday for a second day, briefly touching $90 per barrel as leading OPEC+ members were discussing an output cut next week, but gains moderated on a stronger dollar and weak economic outlook.

Brent crude futures for November rose 18 cents to $89.50 a barrel by 11:13 a.m. EST (1513 GMT), after briefly rising above $90 a barrel. U.S. crude futures for November rose 31 cents to $82.47.

Leading members of the Organization of the Petroleum Exporting Countries and their allies known as OPEC+ have begun discussions about an oil output cut when they meet on Oct. 5, two sources from the producer group told Reuters

One OPEC source said a cut looks likely, but gave no indication of volumes.

 

STOCKS

 

 

Dow plunges 600 points as Apple leads broad market sell-off

 

 

Stocks slumped Thursday, giving back the prior day’s rally, as a decline in Apple shares weighed on the major averages.

The Dow Jones Industrial Average dropped 611 points, or 2.1%. The S&P 500 and Nasdaq Composite declined 2.6% and 3.5%, respectively.

The sell-off was broad-based. At one point during the session, just three stocks in the S&P 500 were trading higher. There are now five gainers in the broader market index.

 

 

10-year yield rises, reversing some of Wednesday’s major losses

 

 

Treasury yields rose across the board Thursday, with the 10-year note reversing some of the losses it made on Wednesday after the Bank of England launched a bond-buying plan designed to stabilize market chaos in the U.K.

The yield on the benchmark 10-year Treasury was at 3.755%, up by 5 basis points at around 11:14 a.m. ET. During Wednesday’s session, it plummeted by 25 basis points after briefly breaching the 4% mark. That marked the largest intraday drop since 2020.

The policy-sensitive 2-year Treasury also climbed higher and was up nearly 13 basis points to 4.219%.

Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%.

 

 

ANALYSIS

 

 

EUR/USD: Unlikely to hold above 0.95 – SocGen 

 

 

“A new cycle low in EUR/USD seems certain, and 0.95 is unlikely to hold.”

“The early signs from the Laender suggest the risk is of an overshoot to the consensus for German CPI inflation, which looks for a rise from 7.9% to 9.5%. Meanwhile, the leading German Institutes forecast a 0.4% fall in GDP next year, which is slightly below the -0.2% consensus figure.” 

“The rates market will price in further ECB hikes and ECB representatives will talk tough, but a growing inflation problem at the same time as the economic threat from Russia, will weigh on the euro.”

 

 

CHART

 

 

GBPJPY Near Term: Upside favored

 

 

Technical View: Long position above 158.25. Target 160.9. Conversely, break below 158.25, to open 156.75.

Comments: The pair breaks above the resistance.

Source: Trading Central 

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

Footnotes
https://www.reuters.com/markets/europe/sterling-falls-pm-truss-defends-economic-plans-dollar-rises-2022-09-29/
https://www.cnbc.com/2022/09/29/gold-precious-metals-us-dollar-federal-reserve.html
https://www.reuters.com/business/energy/oil-prices-fall-amid-strong-dollar-economic-concerns-2022-09-29/
https://www.cnbc.com/2022/09/28/stock-market-news-open-to-close-futures-live-updates.html
https://www.cnbc.com/2022/09/29/10-year-yield-rises-reversing-some-of-wednesdays-major-losses.html
https://www.fxstreet.com/news/eur-usd-unlikely-to-hold-above-095-socgen-202209290908

 

 

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