US Stocks Hit Record Levels Again – S&P 500 up 0.8%
Both the Dow and the S&P 500 reached record highs in trading yesterday, driven by gains in tech stocks ahead of a heavy earnings report week. While the Treasury markets were closed for the Columbus Day holiday, last week’s positive sentiment continued to fuel the equities rally. The Dow closed above the 43,000 mark for the first time, gaining 0.47% on the day, while the tech-heavy S&P and Nasdaq rose by 0.84% and 0.87% respectively. The US dollar strengthened once again, with the DXY reaching a 10-week high, up 0.2% to 103.25. Meanwhile, oil prices took a hit as OPEC downgraded its growth outlook for the coming year, with Brent down 2% to $77.46 and WTI falling 2.29% to $73.83. Gold had a volatile session within recent ranges, ultimately closing 0.2% lower.
Sterling in Focus for FX Traders This Week
Sterling traders are bracing for significant volatility this week, with a slew of tier 1 data due from the UK. Today, the key employment data update is expected, followed by the CPI numbers on Wednesday, and finally the Retail Sales report on Friday. These figures are likely to play a crucial role in informing the Monetary Policy Committee’s next rate decision on 7th November, with many UK households hoping for some relief through a potential rate cut. Despite headline inflation trending in the right direction, the service sector remains ‘sticky’, and a lower-than-expected inflation reading on Wednesday could pave the way for a rate cut. However, any signs of a faster-than-anticipated economic slowdown, particularly from employment or retail sales data, could have a significant market impact.
Busy Day Ahead for Traders
After a quiet start to the week, the macroeconomic calendar picks up today with key data releases from major economies in focus. While there are no major events scheduled in the Asian session, Japan returns from a long weekend, which could bring some movement in the Yen. The London session will see the first of several key UK data releases, with employment numbers due early in the day. The New York session will turn its attention north, with the Canadian CPI figures expected, with a month-on-month decrease of 0.2% anticipated. At the same time, the first US data of the week, the Empire State Manufacturing Index, will also be released.
