Markets:
It was a lively day.
Stock futures were down badly ahead of the open and sank even harder afterwards before finding strong support at Friday’s low. That’s where the rally started and it might have had something to do with CNBC announcing that US Trade Rep Greer would be on TV. The thinking was that he would be softening the US’s position and that’s exactly what he did as he said China realized it over-stepped. He floated some other positive points too and that added to the rebound, eventually taking stocks to strongly positive territory. The Russell 2000 hit a record, climbing more than 2%, in part due to strong earnings from Wells Fargo.
Of course, Trump tossed another hand grenade late, hinting at more retaliation against China for not buying US soybeans and starting a fight over cooking oil. That led to some rapid selling and somewhat of a soft close.
Powell, Bailey and Lagarde all spoke in a rare trio of top central bankers. None offered anything particularly market moving or insightful but it fill the gap left by the absence of US economic data. All of them were relatively upbeat on growth and Lagarde highlighted surprising resilience and that was exactly what we saw in the IMF forecasts, which were generally better than July, particularly for Japan.
Canada was an outlier as the IMF downgraded its forecast for this year and next by 0.4 pp each. That was underscored by a poor building permits report today and a downward revision. Despite that, the loonie was one of the strongest performers today as we await (expect?) some positive US-Canada trade headlines on aluminum, steel, energy and maybe more.
This article was written by Adam Button at investinglive.com.
Michael Feroli, Chief U.S. Economist at JPMorgan Chase, said Chair Jerome Powell’s latest comments “solidified expectations for further rate cuts, starting at its next meeting Oct. 28-29.”
Feroli noted that markets had already been confident the Federal Reserve was leaning toward easing policy, but Powell’s language left little ambiguity. “While there was little doubt the Fed was angled to cut rates at its next meeting, today’s remarks were strong confirmation of that expectation,” he said.
Powell’s remarks reinforced investors’ belief that the central bank is preparing to lower borrowing costs again after a string of softer inflation and labour-market readings, cementing bets for a late-October reduction.
More on Powell:
This article was written by Eamonn Sheridan at investinglive.com.
China has formally begun levying a “special port fee” on vessels linked to the United States, opening a new front in its trade confrontation with Washington.
I posted on the new levy yesterday:
Following up now, info derived from a Caixin report.
At 6 p.m. local time on Tuesday, the Matson Waikiki, a U.S.-flagged container ship carrying 4,870 twenty-foot equivalent units (TEUs), docked at Shanghai Port — becoming the first vessel to face the new levy. With a net tonnage of 30,224, the ship is subject to a charge of about 12.09 million yuan (US$1.7 million) under the fee schedule unveiled by Beijing earlier this month.
Chinese transport officials confirmed to domestic outlet Caixin that the vessel is liable for the new charge, although it remains unclear whether payment has been made. The fee targets ships “linked to the United States” and marks China’s latest retaliatory measure in response to Washington’s escalating trade restrictions.
Analysts view the move as Beijing signalling it can extend its countermeasures beyond tariffs and investment controls into the maritime and logistics domain, potentially raising shipping costs for U.S.-related trade flows through Chinese ports.
This article was written by Eamonn Sheridan at investinglive.com.
China’s walk along the tightrope of slipping back into deflation will continue today with data for September expected to show just that y/y, although m/m is expected to pick up.
Note, Reserve Bank of Australia Assistant Governor (Economic) Sarah Hunter will speak at the Citi Australia & New Zealand Investment Conference 2025 in Sydney at 10.30am local time
This article was written by Eamonn Sheridan at investinglive.com.
Japanese media, Nikkei reporting on the crypto ban:
This article was written by Eamonn Sheridan at investinglive.com.
The back-and-forth swings continued in the major U.S. indices today. Stocks opened lower after China decided to play hardball in response to President Trump’s latest tariff measures, triggering a sharp early sell-off. The Dow Jones Industrial Average dropped as much as 615 points, the S&P 500 fell nearly 100 points, and the Nasdaq slid about 480 points before bargain hunters stepped in.
Midday, sentiment improved after USTR Greer sought to calm market fears over China, prompting a strong rebound. The Dow and S&P 500 both turned positive — with the Dow up 455 points and the S&P gaining 26 points — while the Nasdaq nearly erased its losses, briefly trading down just 3.5 points.
Late in the session, however, comments from President Trump that he was considering terminating business ties with China related to cooking oil and other trade sectors reversed the recovery. Selling pressure returned into the close.
By day’s end, the Dow still managed to finish higher by 202 points (+0.44%), while the S&P 500 slipped 0.16% and the Nasdaq once again lagged, down 0.76% — a fitting end to a day defined by volatility and headline-driven reversals.
Other headwinds include the government shut down (GOP will meet again tomorrow). Anecdotal reports are that employment is slowing.
This article was written by Greg Michalowski at investinglive.com.
The GBPUSD traded higher in the Asian session, testing its 100-hour moving average, but once again found willing sellers leaning against that level. The same dynamic played out yesterday, when the pair also stalled near the 100-hour MA before turning lower.
This time, the selling pressure intensified following weaker-than-expected UK employment data, which pushed the pair below a key swing level at 1.32594 — a level that had marked both Friday’s low and the lowest point since August 5th. The price briefly extended lower twice during the session, reaching a day low of 1.3249, but downside momentum quickly faded as USD selling emerged during the U.S. session, forcing shorts to cover.
That reversal gathered momentum, lifting the pair back toward its 100-hour moving average, now positioned lower at 1.3332. Yet, just as before, sellers have stepped in once again, keeping the pair capped for now.
As we move toward the close and into the new trading day, the 100-hour moving average remains the key short-term barometer for both buyers and sellers.
A break above that level, followed by a move beyond the top of the swing area at 1.3341, would likely invite further upside momentum, with 1.3364 (broken 61.8% retracement) and the 200-hour moving average at 1.3386 (and falling) as next upside targets.
Conversely, if the pair slips back below Monday’s low at 1.3313, it would reopen the door for selling, with the recent lows from this week and last once again in focus.
This article was written by Greg Michalowski at investinglive.com.
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