United States: The vibe is alive

Wells Fargo Research Team Wells Fargo

Summary

United States: The vibe is alive

The U.S. economy continues to demonstrate exceptional strength. Nonfarm payrolls blew past expectations, rising 336K in September. The outturn was made all the more impressive by a net 119K upward revision to the past two months of data.
Next week: NFIB Small Business Optimism (Tue.), CPI (Thu.), Consumer Sentiment (Fri.)

International: Volatility hits global financial markets

Global financial markets remained under pressure for most of this week. The selloff in risk assets primarily stems from a still resilient U.S. economy and hawkish leaning Federal Reserve.
Next week: Brazil Inflation (Wed.), Russia Inflation (Wed.), Argentina Inflation (Thu.)

Interest rate watch: Long-term yields skyrocket

Expectations of heavy Treasury issuance in coming months appear to have contributed to the marked rise in yields on U.S. Treasury securities recently. Private sector borrowers will also feel the sting of higher borrowing costs.

Topic of the week: Speaker race commences as shutdown date looms

Last week, Congress and the president reached a last second agreement to avert a government shutdown that would have begun on October 1. The political landscape in Washington D.C. took another turn this week when former Speaker of the House, Kevin McCarthy, was ousted from his position by House Democrats and a small group of House Republicans.

Download The Full Economic Indicator

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.