Daily summary: Stocks surge as relief rally gains steam

7:47 PM October 4, 2022

  • European indices extended gains for the third day on Tuesday, with the German DAX up 3.78% amid hopes that major central banks will follow RBA footsteps and will slow the pace of interest rate rises. The Reserve Bank of Australia unexpectedly hiked rates by only 0.25bps, defying expectations of 0.50 bps rate hike.
  • Credit Suisse rebounded 9%, after falling more than 10% on Monday, amid concerns about the lender’s ability to restructure its business.

  • Dow Jones is trading 2.40% higher, while the S&P 500 and Nasdaq rallied 2.60% and 2.90% respectively as the number of job openings in the US fell more than expected in August, signaling that tighter financial conditions could be cooling the job market, which raised expectations that FED may slow down tightening process taking into account weakening economy.

  • Twitter stock jumped 17.0% as Elon Musk once again attempted to buy the company for  $54.20.  

  • Oil prices rose 4.0% following news that OPEC+ considers output cut of as much as 2 million barrels per day. Cartel is set to meet in Vienna tomorrow and its outcome may cause some additional short-term moves.

  • Precious metals also benefited from upbeat market sentiment. Gold broke above $1720 level, while silver is testing resistance at $21.00, a level not seen since the end of June 2022. However palladium is the best performer, with gains over 5.0% benefiting from lower Treasury yields and weaker dollar. 

  • The dollar index fell below 111.00, a level not seen in almost two weeks. GBPUSD pair rose to two week high around $1.14 after the finance minister Kwarteng said the government would not cut the top 45% rate of income tax for the biggest earners, reversing earlier pledge. Currently EUR and CHF are the best performing major currencies while NZD and AUD lag the most.

  • Major cryptocurrencies tracked the rebound in global equities. Bitcoin briefly jumped above $20,000 while Ethereum tested resistance at $1360.00.

EURUSD extended its upward move on Tuesday. When looking at the H1 interval, traders should pay attention to the local 1:1structure. As long as the pair sits above support at 0.9880, which coincides with the lower limit of the formation, short-term sentiment remains bullish.  Source: xStation5

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