- Israel decided to make a ground military operation in southern Lebanon, and the troop attacks were to target Hezbollah positions. Despite this incident, the market reaction was negligible However, this afternoon, the White House officials indicated a strong likelihood of an attack on Israel by Iran in retaliation for recent actions
- Iran finally launched a rocket missile strike today. Most reports indicated that the rockets were aimed at military facilities, but there were also media indications that the rockets also targeted civilian concentrations; multiple explosions were confirmed in Tel Aviv, but until now with no injured or deaths reported. US president, Biden ordered US military to aid Israel and shoot down Iranian missiles, according to White House
- As for now, Israel military spokesman said that the attack was serious and will have consequences, however Israel didn't respond by counterattack until now. Iran informed that in the case of Israel revenge, there will be another missile attacks
- In response to the news, there has been a rise in gold prices above $2,670 per ounce. Crude oil is gaining strongly. The rise in WTI oil is already almost 3.5%, and from the daily low it is up 6%
- Wall Street indexes reacted to reports of an Iranian attack with declines and opened today's session lower; semiconductors and technology companies are losing mainly. Defense and oil companies are gain; shares of drone manufacturer AeroVironment gain nearly 7%
- We are seeing a very strong strengthening of the dollar today, with EURUSD trading down more than 0.8% to 1,104, and USDIDX up 0.6%;
- The US ISM index for manufacturing in September remained at 47.2 points, with a small rebound expected. A powerful retreat scores the price sub-index to 48.3 points from 54 points. The employment sub-index retreats to 43.9 from 46 points (lowest since May 2023). Construction spending fell -0.1% m/m vs. an expected rebound of 0.2% vs. -0.3% previously
- New FTEs according to JOLTS came in at 8.04 million vs. 7.711 million previously expected at 7.655 million. Report shows improvement, but downward trend for FTEs remains unshaken
- PMI indices from Europe mostly performed marginally above preliminary readings. However, this did not lead to an improvement in the euro, pressured today by risk-aversion sentiments
- Powell, during a speech at NABE yesterday, indicated that the Fed does not intend to rush into reductions if there is no need. In response, expectations for a 50 basis point cut have fallen and the probability of such a decision is now 40%.
- Key from the Fed's perspective may be the NFP data on Friday, scheduled at 1:30 BST. There have been suggestions of an employment reading below 100,000. With such a weak report, there could be another 50bp cut, (if oil prices will be low enough)
- Cryptocurrencies lose amid geopolitical tensions; Bitcoin drops 3.5% to $61,000, Ethereum down almost 6%. Wheat prices on CBOT rebound 2%, rising above $600 per bushel, while cotton unexpectedly drops today below $73 per bale, despite oil rally (pressuring demand on cheaper polyester)
- Ishiba, Japan's new prime minister, indicated that he would like to see the BoJ maintain an accommodative monetary policy in the longer term, but the issue of interest rates remains with the central bank. The yen weakened after these words, but later reacted to the escalating international situation.
- Tonight, the US will host a debate between the vice presidential candidates: Walz and Vance.
- Lisa Cook of the Fed pointed out that the impact of AI on inflation trajectories in the long term is uncertain; in the long term it could lower it, but in the short term there is a risk of an increase; there are still no studies confirming that AI can cause wages to rise without a concomitant increase in inflation
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