Spreadex Market Update
Gold Surges, Industrial Data Boosts Oil, and Euro Bears Take a Breather
Financial markets witnessed a mixed bag of sentiments as traders grappled with a blend of economic data and labour strikes. Gold prices soared while industrial data propelled WTI oil to fresh highs. Meanwhile, the Euro took a hit after the ECB's recent announcements, and natural gas prices surged due to labour disputes.
Key Factors for Today
- Gold prices soar on NY Manufacturing Index boost during UAW strike.
- Strong US and China industrial data propel WTI oil to a fresh November high.
- Euro bears pause following the ECB's signal to end its hiking cycle.
- Natural gas prices spike in the EU and US due to Chevron LNG strike.
Market Movers
- The New York Federal Reserve's Empire State Manufacturing Index rose unexpectedly to 1.9 in September.
- The 'price paid' component remained unchanged, indicating non-inflationary pressures.
- The UAW strike against major automakers contributed to a risk-off sentiment.
- Gold is potentially heading towards $1940 per ounce after breaking support at $1905 per ounce.
Economic Calendar
- ECB Guindos Speech
- Bundesbank Monthly Report
- CA Housing Starts, PPI
- ECB Panetta Speech
- Bundesbank Mauderer Speech
The Big News
Flat 'Price Paid' and UAW Strike Bolster Gold Prices
The New York Federal Reserve's Empire State Manufacturing Index defied expectations, rising to 1.9 in September, compared to the expected -10 and August's -19. While the 'price paid' component remained unchanged, 'prices received' saw substantial improvement. Coupled with the risk-off sentiment from the UAW strike against major automakers, gold prices surged by 0.70% to reach $1925/oz on Friday.
Industrial Data Sends WTI to Fresh November High
Both the US and China witnessed improved industrial production data, surpassing expectations and hinting at rising demand. US industrial production advanced to 0.2% from a predicted -0.5 contraction. Meanwhile, China's figures reached 4.5%, surpassing the expected 3.9%. WTI oil continued its upward trajectory, boosted by OPEC+ cut extensions and disruptions in Libya due to Storm Daniel. The next resistance level is anticipated at $93.80 a barrel, while support rests at the $90/bbl handle.
Post-ECB Reaction Provides Breathing Room for Euro Bears
Following a slump to a six-month low in response to the ECB's announcement of ending its hiking cycle, EUR/USD bears took a respite as the broader US index experienced a slight drop. Despite the blow dealt by ECB President Lagarde's remarks, traders appeared to secure some gains ahead of the weekend close and this week's highly anticipated FOMC meeting. The next support level is expected at $1.06, with resistance near $1.0730.
Natural Gas Spikes in the EU and US After AU LNG Strike
On Friday, Chevron workers in Australia initiated a strike, further fueling the demand for natural gas amidst disputes over pay, overtime, security, and schedules. European gas prices soared by 9%, given their reliance on Australian LNG imports, while their US counterparts rose by 2.90% by the session's close. With Chevron confirming the end of negotiations, prices could potentially accelerate towards or surpass the $3/cf barrier unless bulls successfully defend the $2.40/cf level.
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