Spreadex Market Update
Post-NFP Rally Pauses Amidst Israel-Hamas Clash
The financial markets witnessed a surprising rally on Friday following a robust Non-Farm Payrolls (NFP) report, but the momentum hit a snag as geopolitical tensions flared up due to the Israel-Hamas conflict.
Key Factors for Today
- Post-NFP Rally Stalls Amidst Israel-Hamas Conflict
- Tech Sector Boosted by Strong Hiring, But the Enthusiasm Fades
- WTI Crude Oil Surges Over 5% as Middle East Tensions Escalate
- Gold Prices Rise 1.30% as Investors Seek Safe Havens
- ECB's Lagarde Expresses Confidence in Achieving 2% Inflation
- Country Garden Faces Deadline Amidst Default Concerns
Market Movers
- Tech Sector's Initial Surge: Nasdaq saw 2% gain with strong hiring.
- Tech Enthusiasm Wanes: Israel-Hamas concerns led to Nasdaq dip.
- WTI Crude's Volatile Surge: Tensions spiked crude oil prices over 5%.
- Gold Rises as Safe Haven: Geopolitical risk drove gold up 1.30%.
- Potential Gold Price Pressure: Rate hike possibility may weigh on gold.
Economic Calendar
- German Industrial Production
- Fed Logan Speech
- Fed Barr Speech
- Fed Jefferson Speech
The Big News
Post-NFP Rally Stalls as Israel-Hamas Conflict Sparks Flight to Safety
The US economy surprised everyone by adding 336,000 jobs in September, surpassing economists' expectations and leading to a brief risk-on sentiment. However, the market mood shifted on Monday as news of the Israel-Hamas conflict prompted investors to seek refuge in safe-haven assets. Treasuries, gold, and crude oil prices all surged, causing a pause in the post-NFP rally.
Tech Sector Boosted by Strong Hiring, But the Enthusiasm Fades
The tech-heavy Nasdaq initially enjoyed a 2% surge on Friday, thanks to the robust hiring numbers, especially in the leisure and hospitality sector. However, concerns over the Israel-Hamas clash led to a lower start on Monday, with Nasdaq futures facing support at 14,715.
WTI Crude Oil Surges Over 5% as Middle East Tensions Escalate
The escalating tensions between Israeli and Hamas forces injected fresh volatility into the crude oil market. WTI crude oil prices soared over 5% to reach $87.20 per barrel on Monday morning. This conflict also raises concerns about a proposed defence deal between the US and Saudi Arabia, as well as its potential impact on Iran's oil supply and exports.
Gold Prices Rise 1.30% as Investors Seek Safe Havens
Amidst growing geopolitical risk, investors turned to gold as a safe-haven asset. The precious metal extended its gains, reaching $1,855 an ounce on Monday. Despite a strong NFP report, the prospect of another interest rate hike before the year's end could weigh on gold prices, with $1,830 an ounce as a key support level.
ECB's Lagarde Expresses Confidence in Achieving 2% Inflation
Christine Lagarde, the head of the European Central Bank (ECB), expressed confidence in the ECB's ability to achieve its 2% inflation target. She cited rapidly falling inflation and improvements in Europe's gas reserves as factors supporting the short-term economic outlook. The EUR/USD pair, while making gains, remains muted with attention on the $1.05 level.
Country Garden Faces Deadline Amidst Default Concerns
China's largest private developer, Country Garden, is approaching a critical deadline with two coupon payments due. The risk of default looms as the grace period for one of September's 15 million yuan coupons expires on the 17th. With substantial offshore bonds and yuan loans, this situation may impact not only the developer but also gold, WTI crude oil, and global indices, including the Footsie.
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