New day, new week, with no major news events scheduled to be released today. Over the weekend, markets had the chance to digest 3 major events. Firstly, the GBP flash crash which happened on Friday morning which pushed the GBP to a 31-year low in a matter of minutes. Second, the US NFP report which indicated employment slowdown more than expected, and thirdly the 2nd US Presidential Debate. This week will feature the FOMC Minutes on Wednesday for fresh signs on the timing of the next interest rate hike. US Retail Sales will also be featured on Friday, while there are many FED members which are expected to speak during the week.
Currencies: Last week, the USD rose slightly by 0.07% however on Friday, the USD declined following the weak employment report. The US added 156k jobs instead of 176k expected. Despite this weak reading, the FED is still expected to raise rates in December. The GBPUSD has steadied around 1.24 however large swings due to the flash crash uncertainty cannot be excluded. The Mexican Peso was a market mover last night, as another presumed victory for Hillary Clinton, helped the Peso rebound versus the USD. Elsewhere, the USDJPY retreated this morning from 103.35 to 102.80 as the rally in stock markets has faded out.
Stocks: US stocks closed mostly in the red, albeit flat. The DJ fell 0.15% while the SP500 and Nasdaq, dropped 0.33% and 0.27% respectively. The presidential election in November is a major risk event for the US economy and the uncertainty would likely limit moves in any direction. In the UK, the FTSE reached as high as 7122, almost closing at historical highs.
Oil and Gold: After a massive selloff that lasted all week, and even intensified on Friday pushing GOLD to its biggest weekly decline since November 2015, gold rebounded from $1240 lows to trade above $1260 today. Initially the yellow metal was sold off on speculation the FED will still raise rates in December, despite a weaker NFP number, however it rebounded as the Dollar weakened across the board, helping it recover from 4 moth lows. OIL prices on the other hand, dropped over doubts that OPEC would curb oversupply. U.S. (WTI) was down 44 cents or 0.88 %, at $49.37 a barrel.
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