- Equity markets from neutral to positive on Thursday.
- US data round is coming.
- Corporate results ease fears about economic growth.
The markets operate with modest gains, supported by corporate results, but also digesting new increases in Treasury bond yields. The dollar appears weak while metals and oil recover from lows in weeks.
Green light
Markets in Europe are mostly in profit. The FTSE 100 is up 0.14% and the CAC 40 is up 0.42%, while the DAX is down 0.30%. In the US, the S&P 500 fell 0.67% on Wednesday and in Thursday’s preview, futures rose 0.21%, while those on the Nasdaq fell 0.02%.
In the premarket, Alcoa falls 11% after an unexpected loss in the third quarter. Tesla posted quarterly results with record revenue, prompting less concern about demand, but it still fell short of analyst expectations. Shares fall around 5% in the premarket. IBM rises 3% after a 6% rise in sales. AT&T, Blackstone, Whirlpool and Union Pacific will present results today
The markets are supported by what are so far positive results for the third quarter, which allay fears about the state of the economy. While the wind against the rise in interest rates continues.
The central bank of turkey cut the benchmark interest rate by 150 basis points to 10.50%, a larger-than-expected cut. USD/TRY remained in the 18.50/60 area. In Germany, a higher than expected rise in the producer price index was known in September, causing the annual rate to remain at 45.8%. Employment in Australia increased by 9,000, less than the 25,000 expected. The unemployment rate remained at 3.5%. AUD/SUD is rising and is trading above 0.6300.
The economic calendar ahead for Thursday in the US shows the report on jobless claims, the Philly Fed, consumer confidence and existing home sales. In addition, several Fed officials (Jefferson, Harker, Bowman and Cook) will speak, in the last words before the period of silence that begins this weekend ahead of the next FOMC meeting.
The dollar is falling on Thursday with DXY down 0.30%. Lower Treasury yields are a major factor behind this move. A decline is recorded from maximum in years. The 10-year bond yields 4.13% after hitting 4.18%, while the 2-year bond yields 4.55%, down from 4.60%.
The Low yields are boosting metals. Gold recovers from weekly lows near $1620 and approaches $1640, while silver climbs 1.60% and topped $18.70.
The and in recovered ground, given the fall in bond yields and after the USD/JPY trade above 150.00 for the first time in more than three decades, triggering verbal interventions. If the fall is confirmed, it would be the first daily fall after eleven days of operations.
The political drama continues United Kingdom. Liz Truss looks increasingly weakened after the departure of more officials. The pound manages to draw against a weak dollar so far on Thursday and loses ground against the euro. Bank of England official Broadbent suggested that interest rates may not have to rise by the magnitude investors currently expect.
Oil prices are rising on Thursday fueled by the possibility that China reduce the quarantine imposed on visitors to the country. It is also favored by the weakness of the dollar. The barrel of WTI rises 1.65% and is around $87.00.
Cryptocurrencies are operating on mixed terrain. Bitcoin it returned to the $19,200 area after making a one-week low in the $18,900 area. Ethereum is at $1,300.
Technical levels
Source: Fx Street
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