Weekly Overview: Forex, Stocks, Crypto, Commodities Oct 8

Lots of major events influence global markets. Our weekly overview will analyze what has happened in Forex, Stocks, crypto, and commodity markets this week.

Forex weekly Overview

Let’s start with the forex market‘s weekly overview. The U.S. dollar rose slightly against major currencies on Friday but within a narrow range. That was mainly due to traders waiting for clues on the pace of normalization of the Fed’s policy in the U.S. non-agricultural employment report.

USD currency index rose 0.1% to 94.294, staying within the range of last week’s one-year high of 94.504.

The U.S. dollar rose 0.3% to 111.96 against the yen and hit the highest level of 111.975 this month. Thanks to the rise in U.S. Treasury yields, the benchmark 10-year Treasury yield hit 1.6010% for the first time since June 4.

The euro consolidated around 1.1550 after falling to a 14-month low of 1.1529 on Wednesday.

The Fed stated that it may start reducing monthly bond purchases as early as November and may follow up with interest rate hikes next year, as the Fed’s policy to get rid of the pandemic crisis strengthens.

The non-agricultural employment data to be released later on Friday is expected to show that the labor market continues to improve. The market generally predicts that there will be 500,000 new jobs in September.

How were other major currencies doing?

At the same time, after rising by 0.55% on Thursday, the Australian dollar fell by 0.26% to 0.7293 US dollars. Earlier it touched $0.7324 for the second day in a row, which is the highest level since September 16.

The pound fell 0.16% to 1.3595 US dollars, holding up most of Thursday’s 0.26% gains when Huw Pill, the new chief economist of the Bank of England, said that inflationary pressures were more complex than initially expected, strengthening expectations for a February interest rate hike.

The Canadian dollar has hardly changed against the U.S. dollar, and after rising to a one-month high of 1.2534 Canadian dollars earlier due to rising oil prices, there has been little change.

Stocks weekly Overview

Now, let’s overview the stock market’s performance this week. Senate Majority Leader Chuck Schumer said that as lawmakers reached an agreement to raise the debt ceiling in the short term, the stock market rose on Thursday.

The Dow Jones Industrial Average rose by 337.95 points, or about 1%, to 34,754.94 points, benefiting from Visa, Nike, and Home Depot gains.

The S&P 500 Index increased 0.8% to 4,399.76, and the technology-focused Nasdaq Composite Index rose nearly 1.1% to 14,654.02.

Thursday’s rise brought the main average index up this week.

With Schumer’s announcement in the Senate that he had reached a debt ceiling compromise, the stock market hit an intraday high, which would temporarily avoid an unprecedented default.

As investors want to avoid government defaults, Washington’s race to agree on the debt ceiling this week has been suspense in the market. Schumer said that legislators reached an agreement to raise the short-term debt ceiling, and he hopes that the contract will be passed later on Thursday. The transaction will extend the debt ceiling until early December.

The stock market generally rose on Thursday with technology stocks and reopened stock trading higher

Twitter rose nearly 4.4%, Nvidia increased 1.8%, and AMD rose 2.7%. At the same time, stocks related to the reopening also rose. General Motors rose about 4.7%. Costco’s stock price rose about 0.8% after reporting better-than-expected sales in September.

The small-cap benchmark Russell 2000 Index rose 1.5% on Thursday.

In addition, the Department of Labor reported on Thursday that with the end of the increase in unemployment benefits, the number of initial claims for unemployment benefits fell sharply last week. As of the week of October 2, the number of people who applied for unemployment benefits for the first time totaled 326,000, which was lower than the Dow Jones expected of 345,000 and lower than the previous week’s 364,000.

Optimism about debt trading began at noon on Wednesday, stimulating the stock market to reverse its downward trend. The Dow reversed its decline by 459 points and closed more than 100 points higher. The Standard & Poor’s Index rose 0.4%, after falling 1.27% before. The Nasdaq Composite Index rose 0.5% after falling 1.2%.

Crypto Weekly overview

What can we tell from crypto’s weekly overview? Among cryptocurrencies, the price of Bitcoin fell slightly after rising to the $55,000 mark on Thursday. In terms of market value, the most popular and world’s largest cryptocurrency fell more than 1% to $54,364. Despite this, Bitcoin rose by 24% in a week.

Other cryptocurrencies have performed unevenly in the past 24 hours. Ether, the second-largest cryptocurrency by market value, hovered at around US$3,619, an increase of more than 2%.

Cardano rose 5% to $2.29, while the price of Dogecoin fell slightly to $0.24. XRP, Litecoin, Uniswap rose, while Stellar and Shiba Inu fell.

As Elon Musk tweeted about his puppy Floki, Shiba Inu soared by more than 300% in a week. After that, Shiba Inu has plummeted by 25% in the past 24 hours.

At the same time, the broader cryptocurrency market is also soaring. Bitcoin has risen by about 30% in the past seven days. The transaction price is around $50,000, and the second-ranked ether is also increasing.

After China’s ban on cryptocurrency transactions and the trouble surrounding El Salvador’s introduction of digital currency as legal tender, digital tokens are still under pressure, and Bitcoin is rising.

Commodities weekly overview

Oil prices on Thursday expanded the previous trading day’s decline as the United States said it was considering selling its strategic oil reserves. In contrast, Russia said it was ready to stabilize the natural gas market.

As of 1306 GMT, the price of Brent crude oil dropped by 16 cents, or 0.2%, to US$80.92 per barrel, after hitting a session low of US$79.08. WTI crude oil futures decreased by 30 cents, or 0.4%, to $77.13 per barrel and hit a session low of $74.96. Both contracts fell about 2% on Wednesday.

On Wednesday, Jennifer Granholm, US Secretary of Energy, said that the government is considering using the country’s Strategic Petroleum Reserve (SPR) to cool the surge in gasoline prices.

Goldman Sachs said that the possible U.S. SPR output might be as high as 60 million barrels, and only a year-end Brent crude oil price forecast poses a $3 downside risk.

The higher-than-expected increase in US crude oil inventories last week also weighed on prices

The U.S. Energy Information Administration stated that inventories increased by 2.3 million barrels and are expected to fall slightly by 418,000 barrels.

Russian President Vladimir Putin said on Wednesday that Russia is increasing its supply of natural gas to Europe, including through Ukraine, in response to the energy crisis and is preparing to stabilize the market amid soaring prices. This move may help cool record-high oil prices.

Analysts said that as some users switch to oil as winter approaches, these natural gas prices may impact the already tight crude oil market.

Earlier this week, the Organization of Petroleum Exporting Countries and its allies (OPEC+) agreed to stick to its plan to increase production by 400,000 barrels per day in November, pushing crude oil prices to multi-year highs.

OPEC+’s decision was partly motivated by concerns that demand and prices may weaken.