US Market Outlook 04 Oct 2018

Posted by Tim Sholl on 04-Oct-2018 22:49:47

The strong US data and comments from Fed Chair Powell that interest rates are a long way from a neutral level and that in the future rates may need to be used to slow the economy , has resulted in sharply rising bond yields in the US. This week we have seen the US10 yield move from levels of 3.07% to now be up at 3.21% which is a 7 year high. This has flowed in to the FX market with the US dollar strong for the past 7 sessions across the major currency pairs.

This has hurt stock indices in Europe and Asia , but in the US the bull market continues with the Dow hitting record highs and the other indices just under record levels. Recent weakness in the large Tech sector has been replaced by strength in the financials as the rising rate environment gives them a better environment to generate profits. 

Trade tensions seem to have eased a little , but I still believe that the US/China dispute will get much worse before it improves , with the US intent on getting China to back down on a long term development plan that I do think China views as very important. 

Latest prices are as follows:

Dow Jones 26738 down 93 / S&P500 2914 down 11 / Nasdaq 100 7591 down 44 .

EUR 1.1504 up 26 / GBP 1.3001 up 62 / JPY 114.08 stronger by 45 / DXY 95.52 up 11

Gold 1201.75 up 4.60 / WTI Crude Oil 75.95 down 47.

Market will look to new US employment data due out on Friday night with expectations of new 180k jobs and 3.8% unemployment rate.

Daily Chart - US Dollar index futures - DXc1 - Rising bond yields is helping to push the dollar higher.


Topics: Trading, Market News, US Market Outlook