Daily Summary: US100 Hits New Highs on Weak NFP 🚨

The main factor driving market volatility: Today’s trading session was dominated by the release of US labour market data that was significantly weaker than expected. In September, the US economy created just 29,000 new jobs, whilst the unemployment rate rose to 4.2 per cent. Paradoxically, this turn of events pleased investors, as it drastically reduces the likelihood of an interest rate rise by the Federal Reserve in October. The market now expects the central bank to hold off on further moves, which has sparked a wave of optimism on the stock markets.

Geopolitics: The G7 countries have agreed to release 100 million barrels of diesel and crude oil reserves over the next four months. This decision is intended to stabilise fuel prices, which have been rising sharply as a result of attacks on Russian refineries and the ongoing war with Iran. Donald Trump’s administration had been exerting strong pressure on Europe over this issue, threatening to impose a total ban on US diesel exports if it did not comply. Representatives of the signatory countries also undertook to refrain from imposing any export restrictions on energy products.

Macroeconomic data: In addition to the disappointing rise in employment, the US payroll figures for July and August were also revised sharply downwards. Wage growth slowed to 3 per cent year-on-year in September, reaching its lowest level since mid-2021. It is worth noting that as recently as August, annual wage growth stood at 3.1 per cent, with consumer inflation at 3.4 per cent. These figures reinforce the markets’ belief that inflationary pressures are gradually easing.

Indices: US stock markets reacted with sharp rises to the prospect of a more accommodative monetary policy. The tech-heavy Nasdaq set a new all-time high, with futures on the index gaining nearly 0.8 per cent by the end of the day. Futures on the broader US market were also in the green, with gains exceeding 0.5 per cent. The situation was quite different on the Polish stock exchange, where the index of the twenty largest companies fell by nearly 0.5 per cent.

Shares: Electric car manufacturer Tesla rose by 5 per cent following the publication of its third-quarter delivery figures, which significantly exceeded analysts’ expectations. Nvidia’s shares reached a record high during the trading session, staging a strong rally on the back of a resurgence in risk appetite in the technology sector. Meanwhile, Nike fell by nearly 6% following a drop in revenue caused by weaker performance in the Chinese market. Semiconductor manufacturer Broadcom recorded significant gains following news of plans to finance a major infrastructure expansion for Anthropic.

Currencies: The US dollar weakened against major currencies in a direct reaction to a weak employment report. Across the broader market, the Australian dollar and the British pound were among the strongest currencies against the dollar today, each gaining 0.3 per cent. The US currency also had to concede ground to the euro and the Japanese yen, which both strengthened by 0.2 per cent. Meanwhile, the Canadian dollar was among the few currencies to lose ground, falling by 0.2 per cent against its US counterpart.

Commodities: Crude oil prices came under heavy pressure following the announcement of plans to release strategic oil reserves. US WTI crude fell by more than 1.3 per cent. Gold is also having a disappointing session today, falling by over 1.1% and thus continuing its correction. Among the few commodities posting gains was natural gas, which rose by over 2%.

Cryptocurrencies: In the digital assets sector, investors’ attention has focused on tokens and funds offering enhanced privacy. The Grayscale Zcash ETF has risen by a massive 60 per cent over the past month, benefiting from a shift in capital towards tools that protect transactions. The Zcash project itself has gained as much as 170 per cent this year, becoming one of the biggest winners across the entire cryptocurrency market. The most popular cryptocurrency, Bitcoin, has remained relatively stable, recording a marginal increase of just over 0.1 per cent today.