Three Markets Worth Watching
The first full week of October was marked by new record highs on Wall Street and historic peaks in key precious metals: gold and silver. Interestingly, this is happening amid ongoing political uncertainty – the U.S. government remains shut down, France is appointing a new prime minister, and Japan’s ruling coalition is facing challenges. In this context, the following markets are worth watching in the upcoming week: EURUSD, SILVER, and US500.
EURUSD
The key focus in the U.S. is inflation data. Although the release was originally scheduled for Wednesday, the government shutdown casts doubt on its timely publication. However, the government has called back some employees to help prepare the data needed for benefit calculations, so the report is expected to be available before the Fed’s decision later this month.
In the eurozone, the euro’s attempt to rebound at the end of last week may continue, provided the political situation in France stabilizes following recent government reshuffling. Additionally, on Tuesday, we will get Germany’s final CPI reading and the important ZEW index. On the same day, investors will be paying close attention to Jerome Powell’s speech at the annual National Association of Business Economists conference.
SILVER
Silver ended last week at new historic highs, following the upward momentum in gold. Although stock indices are trading at all-time highs, the metals market is still operating in a period of considerable geopolitical uncertainty, despite a ceasefire in the Middle East and potential stabilization in France.
The resumption of activity in China after the holiday break will show whether the short-term uptrend can be sustained. While prices are at historic highs, statistical indicators are not yet signaling extreme overbought conditions. The continuation of silver’s rally will largely depend on the behavior of gold and the U.S. dollar. On Thursday, central bankers’ speeches – including Christine Lagarde’s at a World Bank and IMF event – will be worth following.
US500
Wall Street indices remain near record highs as markets await a potential interest rate cut from the Fed later this month. As such, Tuesday’s speech from Fed Chair Jerome Powell will be crucial for investors.
However, the main focus will fully shift to the beginning of earnings season. On Tuesday, financial reports from major banking giants such as JP Morgan, Goldman Sachs, Citi, Wells Fargo, and BlackRock will be released. On Wednesday, Morgan Stanley, Bank of America, and Europe’s ASML (key for the tech sector) will follow. The U.S. banking sector has been in a corrective trend since late September, so their results will play a decisive role in setting the direction for the US500 in the coming weeks.
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