A busy trading calendar meant that the major assets were exposed to asset-specific catalysts and new market themes!

Which headlines caught the investors’ attention and how did your favorite assets trade?

Let’s break down the major market moves on Thursday:

Headlines:

• Japan trade balance shifted to a deficit of JPY 294.24 billion in September 2024, compared to a surplus of JPY 60.56 billion in the same month the previous year, exports unexpectedly fell 1.7%
• AUD sharply higher as Australian economy added 64.1k jobs in September
• Switzerland’s trade surplus widened from upgraded 4.74B CHF to 4.92B CHF (4.85B CHF forecast)
• Eurozone headline CPI confirmed at 2.7% as expected for Sept, core CPI downgraded from 1.8% to 1.7%
• ECB cuts rates in October, signals openness to further adjustments
• U.S. headline retail sales up 0.4% m/m in Sept (0.3% forecast, 0.1% previous); core retail sales up 0.5% m/m (0.1% forecast, previous reading upgraded to 0.2%)
• U.S. initial jobless claims at 241K as expected, 260K previous for the week ending Oct. 10
• U.S. Philly Fed manufacturing index rose from 1.7 to 10.3 vs. 4.2 forecast in Oct
• U.S. industrial production slowed 0.3% vs. projected 0.1% m/m dip in Sept, capacity utilization up 77.5% vs. 77.9% forecast to signal downside wage pressures
• EIA crude oil inventories down 2.2M barrels (+1.8M expected, +5.8M previous)
• Japan national core CPI down from 2.8% y/y to 2.4% vs. 2.3% forecast in Sept

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView

With no fresh catalysts to shake things up and major events like the ECB decision and U.S. retail sales around the corner, the major assets pretty much stayed in their lanes during the Asian and early European sessions.

The standouts were Bitcoin (BTC/USD) and U.S. crude oil. Bitcoin extended its drop after getting rejected near $68,000, while oil took a hit after China’s underwhelming housing-related stimulus update.

Volatility picked up once the European Central Bank (ECB) cut rates, as expected, and hinted at more cuts to come. Over in the U.S., retail sales came in stronger than expected, along with better-than-anticipated weekly jobless claims and the Philly Fed manufacturing PMI, cooling off hopes for aggressive Fed rate cuts.

The U.S. 10-year Treasury yield spiked to 4.09%, gold hit a fresh record at $2,692, and the Dollar Index climbed to 103.75. U.S. stocks rallied, with chipmaker TSMC posting strong earnings, pushing the Dow to a fourth-record close in five sessions. Meanwhile, U.S. crude ended the day near its lows at $70.11, and bitcoin managed to bounce back to $67,400.

FX Market Behavior: U.S. Dollar vs. Majors:

Overlay of USD vs. Major Currencies Chart by TradingView

Aside from its weakness against AUD following Australia’s jobs report, the U.S. dollar traded in ranges during the Asian session.

USD started edging lower ahead of the ECB decision and U.S. data releases, but ECB’s “dovish cut” event and positive U.S. reports all helped push the dollar higher.

The dollar pulled back some of its post-report gains against “risk” currencies like EUR, GBP, AUD, NZD, and CAD, but it also extended its upswings against safe havens CHF and JPY by the end of the U.S. session.

Upcoming Potential Catalysts on the Economic Calendar:

• U.K. retail sales at 6:00 am GMT
• Euro Area current account at 8:00 am GMT
• U.S. building permits and housing starts at 12:30 pm GMT
• FOMC member Christopher Waller to give a speech at 4:10 pm GMT

The data calendar turns less busy today as we only have mid-tier data from the U.S. after the U.K. has published its latest retail numbers.

So, with few potential catalysts on the docket, look out for a continuation or pullback from yesterday’s themes and for positioning ahead of next week’s events. Good luck and good trading!

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