STATE OF THE MARKETS

Dollar stalled as stocks and bonds tumbled. US stocks and bonds tumbled further on Wednesday after Fed’s Loretta Mester continued to press more rate hikes and to more than 4% early next year. Dow (-0.88%) fell the most, followed by S&P (-0.78%), Russell (-0.62%) and Nasdaq (-0.56%) as yields continue to rise across the board. As at writing, the short term 1Y (3.56%), 2Y (3.50%) and 3Y (3.51%) yield more than 3.50% while the longer 10Y yields 3.20% and 3.31% for the 30Y tenure. Dollar was stalled around the 108.80 barrier though heavy bidding was seen to lift the King to the 109 handle.

In the commodity markets, crude continued its downward trajectory as global recession fears stoked demand concerns. The black gold settled around $88.55/bl as New York closed. Rate hikes continue to weigh on the non-interest bearing gold as bidders lost interest in the metal, sending prices near July low around $1,700/oz. Elsewhere, Dollar strength continues to force iron ore to drift lower to $104.80/tn.

In the FX space, sentiments were mixed as Dollar and Swiss advanced into the demand territories while Yen pulled back to offers. Euro and Aussie continue to be on bids across all horizons while Kiwi, Loonie and Sterling were sold off.

On Thursday, markets expect to remain on the sideline ahead of NFP and the long holiday weekend. Earnings and economic data releases to watch includes Broadcom (AVGO), Lululemon (LULU), Hormel Foods (HRL), Campbell Soup (CPB), Toro Co (TTC), Ciena Corp (CIEN) and Weibo (WB) as well as the latest US jobless claims, productivity, costs and PMI manufacturing index.

OUR PICK – No New Pick

We stay on the sideline. With NFP ahead this Friday and VIX continuing to rise above 26, we see choppy markets ahead and decide to stay on the sideline for now.

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Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.