FOMC Minutes Indicate Softening Fed Stance in Financial Markets

In a surprising turn of events, the latest release of the Federal Open Market Committee (FOMC) minutes has unveiled a more cautious and less hawkish stance than previously anticipated. This development, coupled with a weakening US Dollar, has driven the Nasdaq to a remarkable four-day streak. Here's a closer look at today's key factors, market movers, and the significant news shaping the financial landscape.

Key Factors for Today

• Nasdaq's 4-day surge continues, propelled by a weakening dollar.
• WTI Crude prices plummet 3.15% following a staggering API build report.
• Gold rally gains momentum as a shift from 'How High' to 'How Long' narrative emerges.
• ECB members express differing views on peak interest rates.

Market Movers

• Nasdaq enjoys a 4-day winning streak amid a weakening US Dollar.
• US Producer Price Index (PPI) for September beats expectations at 0.5%, driven by higher energy and food costs.
• FOMC minutes from September reveal a less hawkish stance, resulting in a flat session.
• US equities continue upward trend for the fourth consecutive day, with Nasdaq rising by 0.85% to 15,275, keeping an eye on 15,420 unless support at 15,150 is breached.
• WTI Crude prices plummet by 3.15% due to a massive API inventory build.
• Gold price rises to $1,875 per ounce from Tuesday's low of $1,860, with early Thursday demand at $1,880. Strong resistance expected at $1,885 per ounce.
• EUR/USD currency pair closes flat but maintains a positive trend for the sixth consecutive session, staying above $1.06, potentially leading to further gains towards $1.0655.

Economic Calendar

• UK GDP
• ECB Meeting Accounts
• US CPI Inflation
• Initial Jobless Claims
• EIA Crude Oil Stock Change
• Fed Bostic Speech
• OPEC Monthly Report

The big news

Nasdaq Posts 4-Day Streak on Softening Dollar

The US Producer Price Index (PPI) for September outperformed expectations, rising to 0.5% compared to an expected 0.3%. This increase was primarily driven by higher energy and food costs. However, the dollar's initial advance was short-lived as the FOMC minutes from September revealed a less hawkish stance, resulting in a relatively flat session. Notably, US equities continued their upward trajectory for the fourth consecutive day, with the Nasdaq climbing 0.85% to 15,275, eyeing the 15,420 mark unless support at 15,150 is breached.

WTI Plunges 3.15% After Huge API Build Report

The American Petroleum Institute (API) reported an unexpected crude build of 12.9 million barrels for the past week, in stark contrast to the anticipated 500,000-barrel decline. Gasoline inventories also swelled by 3.6 million barrels, well beyond the projected 800,000-barrel decrease. Concerns about diminishing US fuel demand weighed heavily on WTI crude prices, despite Exxon Mobil's acquisition of Pioneer Natural Resources in a landmark $59.5 billion all-stock deal, solidifying its position as the largest producer in the US oilfield. Key price levels to watch are $80 for expected support and $84.70 per barrel for resistance.

Gold Rally Supported From "How Long" Narrative

In a significant shift, the FOMC minutes revealed that some policymakers are advocating for a change in focus from "how high" to "how long" regarding monetary policy. This adjustment, coupled with the 3-month short end of the yield curve and the dollar's stability, allowed gold to extend its safe-haven rally. Gold's price increased to $1,875 per ounce from Tuesday's low of $1,860 and is showing early Thursday demand at $1,880. Strong resistance is anticipated at $1,885 per ounce.

ECB Members Point to Different Peak Rates

Dutch central bank chief Klaas Knot expressed confidence in current policy settings but emphasized vigilance and readiness to resume rate hikes if necessary. Conversely, Spain's central bank head, Pablo Hernandez de Cos, hinted at the possibility of interest rates remaining unchanged for some time before potential cuts, pointing to peak rates. The EUR/USD currency pair concluded somewhat flat but maintained a positive trend for the sixth consecutive session, holding steady above $1.06, potentially paving the way for further gains towards $1.0655.