Headlines:

• The Indian Rupee's sharp rebound following RBI intervention may prove temporary amid renewed surge in oil prices
• Solana remains under pressure as macro and geopolitical headwinds overshadow Alpenglow upgrade
• Crude oil surges further amid Houthis attacks on Saudi energy targets and stalled US-Iran negotiations
• Germany October ZEW survey current conditions -35.9 vs -45.0 expected
• Ethereum consolidates around key technical levels amid a challenging macro backdrop. What to watch next?
• Gold rejects a key trendline as higher oil prices and yields weigh; growth concerns remain in focus
• European stock market open: Equities retreat as bond yields and fiscal risks weigh
• What are the main events for today?
• BOJ reportedly may upgrade inflation forecast, hold rates steady at next week's meeting
• UK unemployment rate falls to 4.7% as jobs rebound, keeping BOE rate hike bets intact
• German producer prices hit highest since March 2023 as energy costs soar, fueling inflation worries
• Macro pulse: France's debt crisis doesn't have to get worse to keep hurting the euro
• FX option expiries for 20 October 10am New York cut
• AI stocks rebound on Wall Street but Treasury yields could pour cold water on the recovery
• How to trade gold today before Netflix reports tonight

Markets:

• WTI crude oil up 2.16% to $100.65
• Gold down -0.46% to $4120.00
• CAD leads, EUR lags
• S&P 500 down -0.14% to 7724.00
• US 10y Treasury yield down 2 bps to 5.119%
• Bitcoin down -0.49% to $81,453

It's been a quiet session in terms of news and data releases. The main highlight was the UK employment report which surprised to the upside, with unemployment falling to 4.7% from 4.9% and employment rising by 102K versus 5K expected. Wage growth was mixed but remained relatively firm, particularly excluding bonuses, while September payrolls also improved significantly. Overall, the figures reinforced the case for BoE rate hikes, with markets bringing the timing forward. The November hike was already fully priced in, but the probabilities for another hike in December rose. 

Reuters reported that the BoJ is expected to keep rates unchanged at 1.25% on October 30, despite potentially upgrading its FY2027 inflation forecast as higher oil prices feed through to consumer prices. Policymakers appear comfortable assessing the impact of September’s hike, with limited evidence of a broader wage-price spiral. However, elevated oil prices and further yen weakness could sustain imported inflation, increasing pressure for additional tightening. Markets see little chance of a move next week but are pricing in roughly 73% odds of a December hike.

Finally, Germany’s October ZEW survey showed the current conditions index improving more than expected to -35.9 from -47.1, while economic sentiment fell to 28.1 from 34.7, signalling weaker optimism about the future outlook. ZEW noted that higher energy prices continue to weigh on private consumption and investment, leaving the recovery fragile and not self-sustaining.

In the markets, the rise in oil prices amid stalled US-Iran negotiations and the ongoing Saudi-Houthi conflict continues to weigh on risk sentiment. Moreover, credit spreads continue to widen, credit default swap spreads for AI-linked hyperscalers and data center operators have surged to record highs and the Federal Reserve is forced to keep a hawkish bias amid higher inflation. Everything seems to be hanging by a thread...

This article was written by Giuseppe Dellamotta at investinglive.com.

Source: Investing Live - News