Daily Summary: 10-Year Yields at 15-Year Highs!

7:58 PM October 2, 2023

  • Monday's session in European markets witnessed significant sell-offs in major stock indices. The German DAX dropped by 0.91%, the British FTSE 100 lost 1.28%, and Poland's WIG20 declined by over 2.21% during the day.

  • Sentiments on Wall Street were more divided, but selling pressure prevailed. The Nasdaq-100 was the only benchmark posting minimal gains (+0.18%). The S&P500 index lost nearly 0.47%, while the Russell 2000 fell by over 1.83%.

  • The reason behind the substantial sell-offs in the markets is the ongoing rise in yields of US Treasury bonds, particularly the 10-year yield, which reached 4.674% (15-year highs).

  • The US dollar was the strongest currency among developed countries, with the EURUSD pair losing 0.65%, trading below the 1.05 level, adding to the selling pressure on stocks and indices.

  • Investor attention during the afternoon trading session in the US turned towards speeches by Powell, Barra, Powell, and Harker from the Federal Reserve (Fed). Overall, bankers' comments seemed slightly dovish due to the dominant focus on maintaining a healthy and robust job market. Most bankers confirmed that the Fed is nearing the end of its interest rate hike cycle (implying no or just one 25-basis-point rate hike, although the swaps market does not give such a chance and already prices in the end of the cycle).

  • In the stock market sector, the automotive industry also attracted significant attention today. According to Reuters, General Motors and Stellantis are facing billion-dollar fees as part of the Biden administration's proposal to raise fuel consumption standards by 2032.

  • In the energy commodity market, we observed a drop in oil prices (WTI), which were down by nearly 2.0%, returning below $90 per barrel, while natural gas (Natgas) lost 3.1%.

  • Rising bond yields also accelerated declines in silver and gold prices, which lost 4.20% and 0.80%, respectively. Gold is trading at its lowest level since the beginning of March 2023.

  • In the cryptocurrency market, the first part of the day saw significant increases, especially in Bitcoin and Ethereum, which gained 4.0% and 2.0%, respectively, at their peak. However, in the second part of the day, the gains were curtailed as risk aversion increased.

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Xtb logo

Join over 847 000 XTB Group Clients from around the world.