STATE OF THE MARKETS

Stocks jumped as Feds turned dovish. US stocks rallied higher on Wednesday after Fed’s Chair Powell commented that the central bank may have to moderate its rate hikes as soon as December. The tech-laden Nasdaq (+4.41%) jumped the most, followed by S&P (+3.09%), Russell (+2.72%) and Dow (+2.18%) as risk averse investors continue to flock to bond’s safety, sending yields lower across the board. The shorter 2Y yields dropped to 4.33% while the 10Y benchmark hit 3.61% as the Dollar index continued to drift lower to 105.50 as at writing.

In the commodity markets, Dollar weakness sent major commodities higher with crude oil climbed higher for the third day and settled near $80.50/bl as New York closed. Similarly, gold continues to rise past the $1,780/oz barrier while iron ore breaks the $93.20/tn barrier as investors continue to re-price the Dollar.

In the FX space, overall sentiments seemed mixed as Kiwi and Yen continue to dominate demand territories across all horizons alongside Sterling, amid portfolio rebalancing on month end. King Dollar and Loonie remain on offers as Feds slow down on rate hikes and crude under pressure. Sterling and Aussie were seen synching across all horizons, a sign that turnaround is near.

On Thursday, markets may turned choppy as long term investors look to cash out on further rally in equities while short term traders may look to scoop some bargains as more earnings reports roll in. Earnings releases to watch includes TD Bank (TD), Bank of Montreal (BMO), Dollar General (DG), CIBC (CM), Marvell Tech (MRVL), Kroger (KR), ChargePoint (CHPT) and Ulta Beauty (ULTA) as well as the latest figures in the US manufacturing and construction spending, personal consumption expenditures and jobless claims.

OUR PICK – No New Pick

We stay on the sideline for now. With two trades stopped out recently – Crude Oil and NZD/USD – and choppy markets ahead of the NFP Friday, we decided to stay on the sideline for now.

For high probability picks, please use our Trading Central services. You could also join us at MFM’s TradeCopy