Morning wrap (03.10.2024)

• Yesterday's session on Wall Street ended in mixed sentiment. On an intraday basis, all indices traded in the +-0.2% range, with the Russell 2000 posting the largest declines (-0.19%) and the Dow Jones posting the largest gains (+0.08%).

• At the moment, futures contracts are pointing to declines in most stock market indexes. This is largely due to a pullback on the Hang Seng, which is the only Chinese index currently trading despite the ongoing Golden Week holiday. The index's decline of more than 2% raises the question of whether the euphoria around China and the stimulus packages is coming to an end.

• Growth, however, is extended by Japan's Nikkei, amid comments from Bank of Japan board member Asahi Noguchi, who spoke to business leaders in Nagasaki. The banker said he sees the need for the Bank to maintain loose monetary policy, given that it will take some time to recover from deflation. 

• In the broad FX market, the U.S. dollar and the Swiss franc are currently the best performers. In contrast, we are seeing larger pullbacks in the pound and Antipodean currencies.

• The Australian dollar and the New Zealand dollar are losing ground on the back of a weak final reading of services PMI data for September. The reading came in at 50.5, compared to earlier figures of 52.5. Such data could theoretically encourage local central banks to take a more dovish stance towards their monetary policy, hence the observed weakness in these currencies. 

• In the commodity market, we do not observe excessive price fluctuations relative to yesterday's session. Crude oil and natural gas are trading slightly above, while gold is retreating by 0.2%. 

• At the same time, Bitcoin is regaining some ground and adding 0.55% on an intraday basis. 

• Investors' attention turns today to CPI data from Switzerland, services PMI readings from the world's major economies, jobless claims data; Challenger from the US, ISM PMI reports from the US, and Durable Goods Orders data from the US.

Volatility currently observed in the broad currency market. Source: Bloomberg Financial LP