Here is what you need to know on Thursday, October 6:
Following another volatile day on Wednesday, financial markets stay relatively calm early Thursday as investors reassess their positions ahead of Friday's highly-anticipated jobs report from the US. The US Dollar Index stays in negative territory below 111.00, the US stock index futures trade flat and the benchmark 10-year US T-bond yield fluctuates above 3.7%. Later in the session, Retail Sales data from the euro area and the European Central Bank's policy meeting accounts will be looked upon for fresh impetus. The US economic docket will feature weekly Initial Jobless Claims and speeches by FOMC policymakers.
The risk-averse market environment amid escalating geopolitical tensions helped the greenback erase some of the losses it suffered against its major rivals earlier in the week. Moreover, the upbeat ADP private sector employment data and the ISM Services PMI report provided an additional boost to the dollar. During the American trading hours, hawkish Fed commentary revived expectations for one more big rate hike in November. According to the CME Group FedWatch Tool, markets are currently pricing in a nearly 70% probability of a 75 basis points rate Fed rate increase in November.
Fed's Bostic: Federal Reserve's fight against inflation is likely “still in early days”.
Fed's Daly: I see more rate increases as necessary.
Meanwhile, OPEC+ announced that it decided to lower crude oil production by 2 million barrels per day from November. In response, the White House said that US President Biden was disappointed by the group's "shortsighted" decision. The barrel of West Texas Intermediate, which is already up 10% this week, was last seen trading modestly higher on the day at $88.25.
Following its failed attempt to break above parity on Wednesday, EUR/USD seems to have gone into a consolidation phase slightly above 0.9900 early Thursday.
GBP/USD snapped a six-day losing streak on Wednesday but managed to close above 1.1300. In the absence of high-impact macroeconomic data releases from the UK, the pair fluctuates in a narrow range at around 1.1330 in the European morning. Later in the day, UK and EU officials are expected to restart discussion on the Northern Ireland protocol.
Gold suffered heavy losses but buyers successfully defended $1,700 on Wednesday. XAU/USD is trying to regather its bullish momentum and was last seen trading modestly higher on the day above $1,720.
USD/JPY extended its sideways grind below 145.00 and failed to make a decisive move in either direction. The pair stays within its 10-day-old trading range at around mid-144.00s.
Bitcoin failed to build on Tuesday's gains on Wednesday but ended up closing the day above the key $20,000 level before going into a consolidation phase early Thursday. Ethereum continues to edge higher toward $1,400 after having struggled to find direction on Wednesday.
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