Markets:

  • Gold up $19 to $1916
  • US 10-year yields down 14 bps to 4.19%
  • WTI crude oil down $1.08 to $78.55
  • S&P 500 up 51 points to 4449
  • AUD leads, GBP lags

Do any of these moves matter ahead of NVDA earnings? I don't know but I haven't seen an earnings released this hyped up in a long time.

Under the surface, the market cheered a soft US PMI from S&P Global. That's a good forward-looking metric of the market and showed a surprise decline in an indication that Fed hikes are working. It also demonstrates that bad news is good news for risk assets on the assumption the Fed is done hiking and will cut by around 100 bps next year. The risk is that Powell pushes back against that on Friday (though the market simply may not believe him).

In any case, the dollar fell steadily after the data, which matched soft PMIs in the UK and Eurozone. Oil fell on the data but USD/CAD reversed from 1.3600 to 1.3535 anyway as the risk trade won out.

The plane crash of Prigozhin confirmed many suspicions about what would happen to the leader of the mutiny against Putin and now we await any potential fallout. For broader markets though, it was more of a curiosity than a reason to make trades.

FX news wrap