Tech boosts Asian Pacific markets

US stock index futures were little changed in early trade this morning. This follows on from another strong session on Wednesday, which brought fresh all-time closing highs for the S&P 500, NASDAQ and Russell 2000. These closed up 0.6%, 1.1% and 1.0% respectively. The Dow was effectively unchanged, leaving the index just 0.2% below its own all-time closing high from Friday.

Source: TN Trader

Last night saw the release of the minutes from the Federal Reserve’s September FOMC meeting. This was when the Fed cut rates by 25 basis points, as expected, to resume its loosening of monetary policy, which had been on pause since last December. The meeting was notable for several reasons, including that Stephen Miran, President Trump’s preferred choice as a replacement governor, deviated from the broad consensus by voting for a 50-basis-point cut.

But the minutes also revealed another clear division among policymakers, who were narrowly split between one or two more 25 basis point cuts before year-end. But it was also clear that all FOMC members were concerned about recent weakness across the labour market. This follows two successive weak Non-Farm Payroll numbers.

Unfortunately, the ongoing government shutdown has meant that September’s update, which was scheduled for last Friday, couldn’t be released. Despite this lack of clarity, the probability of two further rate cuts this year has risen, according to the CME’s FedWatch Tool, and this has helped to underpin US equities. Overall, investors took the minutes in their stride, viewing them as neither overly dovish nor hawkish.

Meanwhile, NVIDIA rose over 2% yesterday after CEO Jensen Huang noted that computing demand has “gone up substantially” this year. The world’s most valuable company by market capitalisation rose another 1% in early trade this morning, to mark another all-time intra-day high. Otherwise, the tech majors were mixed, with no notable winners or losers.

With no major US data releases scheduled due to the ongoing government shutdown, attention today turns to remarks from Fed Chair Jerome Powell at a community bank conference, followed by comments from Michelle Bowman and Mary Daly later in the day. Traders will also keep an eye on third-quarter earnings reports from Delta Air Lines and PepsiCo before the bell.

European stock indices were mixed in early trade this morning. But there were decent gains for both the French CAC and German DAX. This morning’s rally took the latter to a new all-time intra-day high, while the CAC has now made back most of its losses from Monday.

It slumped over 2% at one stage following the surprise resignation of French Prime Minister Sébastien Lecornu. Gains in the CAC came even though M. Lecornu was unable to secure a firm budget deal with other political parties by last night’s deadline. President Macron is expected to announce a new Prime Minister ahead of the weekend.

The UK’s FTSE 100 fell around 0.5% in early trade, pulling back from yesterday’s record high. Dividend adjustments accounted for some of the fall. But it was weakness across the banking sector which was the major culprit. This followed the overnight announcement that HSBC was looking to take the Hong Kong Bank, in which it has a 63% holding, into private hands. HSBC fell 6%, while Lloyds dropped around 3%. NatWest was little changed.

Source: TN Trader

The US dollar was firmer across the board in early trade this morning. This saw the Dollar Index push up further towards 99.00, to hit its highest level since 1st August. But it pulled back from its best levels as the morning progressed. It looks as if the dollar is now pausing for breath. This is unsurprising given this week’s rally.

The Dollar Index had tacked on around 1.5% from Friday’s close, and around 3% since it hit a multi-year low when it broke below 96.00 in mid-September. It does feel as if speculation over the dollar’s demise as the world’s reserve currency has been overdone. It may have had a dismal nine months or so, but it is starting to look a bit brighter.

The US dollar came under relentless selling pressure as investors factored in the possibility of aggressive rate cuts from the Federal Reserve, while uncertainty over tariffs and the Trump administration’s comments that it favoured a weaker greenback to help cut the trade deficit have all contributed to its weakness. But it’s possible that the dollar may have turned a corner and is back in favour despite the ongoing government shutdown.

It feels as if investors have cast around for an alternative only to realise that the greenback is the cleanest shirt in the currency laundry bag. The USD/JPY hit an eight-month high overnight.

Source: TN Trader

Gold was little changed overnight, although it has pulled back a touch from yesterday’s record intra-day high of $4,059. Interest has certainly picked up amongst the mainstream media, particularly after gold surged above $4,000 in early trade on Wednesday. Could this trigger a fresh wave of buying as retail investors rush to join the latest gold rush? It’s certainly possible, although such interest is likely to be in coins, jewellery and bullion. Nevertheless, every little helps.

It looks as if gold may be consolidating after two months of relentless gains. Overnight, gold retested $4,000 as support and bounced. In fact, all recent attempts at a retracement have been short-lived, with every dip quickly met by aggressive buying interest. This persistent demand underscores the depth of conviction among market participants, even at such high price levels, and as the daily MACD pushes up further into overbought territory.

Source: TN Trader

Silver has ignored this morning’s pause in gold’s rally and has powered higher to a fresh fourteen-year high. Silver was up around 1.6% to hit $49.68 in early trade. This meant that it was around 0.5% below its all-time high, just below $50 per ounce.

This is an extremely significant level for silver, and it may meet some hefty resistance around here. But traders will also note how easily it broke above $40 and $45 in September, and the bulls will be hoping to repeat the process.

Silver’s overall tone remains firm, and price action suggests that buyers are still in control. But, as with gold, silver’s daily MACD suggests that with every rally, the market heads deeper into overbought territory. Yet so far, the bulls don’t seem to care.

Source: TN Trader

Crude oil prices pushed higher this morning in a move which saw front-month WTI push up towards $62.60. But in what seems to be unravelling as a repeat of yesterday’s trade, crude ran into resistance and then dropped back below $62 per barrel. Last week, oil lost over 7% as traders prepared themselves for Sunday’s OPEC+ meeting.

The consensus expectation was that the group would once again announce that it would permit a bigger-than-expected production increase from its members. The forecasts ranged from an increase of anything from 250,000-500,000 barrels per day (bpd). But the actual number was 137,000 bpd for November.

The news saw crude oil gap higher at the beginning of this week. But the rally is looking a bit tepid, with little follow-through after the initial bounce. Front-month WTI did manage to break above resistance (previously support) around the $61.50 area, but it was unable to build on these gains, and now it is struggling to hold $61.50 as support.

Source: TN Trader

Despite this, Wednesday’s US inventory data showed a larger-than-expected build. Progress on the Gaza peace plan is undoubtedly good news. But the two-year war has had a negligible effect on the oil price.

Gas prices fell sharply yesterday afternoon, having hit a three-and-a-half-year high earlier in the day. Prices were steadier this morning, although there’s been a modest decline in upside momentum. Investors are now preparing for the weekly inventory data due later this afternoon.

Traders will be watching for clues about near-term supply and demand dynamics. For now, gas appears to be consolidating, with sentiment turning more cautious following the rally which began in August.

Bitcoin was a touch lower this morning, retreating further from Monday’s all-time high above $126,000. Traders took profits following the rally, which began late in September. The tone remains orderly rather than panicked, suggesting this is more of a natural cooling-off phase than a broader reversal.

Meanwhile, Citi reaffirmed its backing of stablecoin firm BVNK, reflecting continued institutional interest in the space despite the pullback in prices. Ether pulled back sharply and has so far failed to come within sight of the key $5,000 level. The first significant support area comes in around $4,250.

Volatility remains subdued, although the VIX has been inching higher since the third week of August. Overall, the index continues to reflect calm conditions and limited hedging demand. Traders appear comfortable with the current risk environment, with most major stock indices at, or hovering just below, record highs.

The lack of movement in the VIX underscores the persistence of a low-volatility backdrop that has defined much of the recent rally.

US markets continue to be driven by the AI trade, with Nvidia and AMD leading the charge. Fed Chair Jerome Powell’s comments later today will be closely watched for any hints on the timing of the Fed’s next move, although investors seem convinced that there will be two 25-basis-point rate cuts before year-end.

Gold’s powerful run may be entering a consolidation phase, while the dollar appears steady after an extended rally. Market sentiment remains positive but with growing murmurs of concern from major names - including JPMorgan’s Jamie Dimon - who warned of the potential for a sharp correction.

Traders are increasingly mindful that while AI growth may be the driving force behind the market’s rise, it could just as easily become its undoing. For now, though, the bulls remain firmly in control.