- Somewhat bearish remarks from ECB president
- Strong odds of October eurozone interest rate cut
Euro fell in European trade on Tuesday and extended the losses for the third straight session against the US dollar, plumbing one-week lows, under pressure from earlier data that showed slower than expected German inflation, and after bearish remarks from ECB President Christine Lagarde.
The data and remarks boosted the odds of an October 0.25% interest rate cut by the ECB.
The Price
The EUR/USD pair fell 0.3% today to $1.1100, the lowest since September 23, with a session-high at $1.1144.
The pair closed Monday down 0.2%, marking the second loss in a row on profit-taking off 14-month highs.
Euro rose 4% against the dollar in the third quarter, the first quarterly profit in three on hopes for a reduction in the US-eurozone interest rate gap.
German Inflation
Earlier German data showed consumer prices rose 1.6% y/y in September, slowing down from 1.9% in August, and the slowest reading since February 2021.
Lagarde
European Central Bank President Christine Lagarde told the European Parliament yesterday that recent developments extend confidence that inflation is returning to targets, which will reflect in the October policy decision.
European Rates
The odds of an ECB 0.25% interest rate cut in October jumped from 80% to 90% following the latest data.
Now investors await inflation data for the whole eurozone, expected up 1.8% in September, slowing down from 2.2% in August.
Most US stock indices were little changed today but headed for monthly and quarterly gains.
Wall Street sustained massive losses in the first week of the month as investors expressed concerns about seasonal changes and the potential economic recession.
But the stock market recovered quickly and marked three successive weekly profits as the Federal Reserve voted to cut interest rates by 50 basis points.
On trading, Dow Jones fell 0.2%, or 105 points as of 15:26 GMT to 42,207, while S&P 500 stabilized at 5737, while NASDAQ shed 0.1% to 18,128.
- Mounting concerns about global demand as China struggles
- The market faces a potential supply glut
Oil prices fell in American trade on Monday, resuming the losses after a hiatus on Friday, with prices still under pressure after reports that Saudi Arabia is preparing a production hike in December.
Oil prices are also suffering from weak global demand outlook, as China’s economy stumbles, and a potential supply glut develops.
Prices
US crude fell 1.4% today to $67.60 a barrel, with a session-high at $69.28.
Brent shed 1.2% today to $71.07 a barrel, with a session-high at $72.75.
On Friday, US crude rallied 1.8%, while Brent added 0.85%, marking the first profit in three days as it recovered from two-week lows.
Oil prices lost 3.75% on average last week, the first weekly loss in three.
Saudi Output
The Financial Times reported that Saudi Arabia is willing to give up its unofficial price target at $100 a barrel.
According to sources, Saudi officials are preferring to hike oil production in December, even if it led to a prolonged phase of lower oil prices.
Libyan Output
Prices are also pressured by expectations that Libyan crude output will spike in upcoming weeks as warring factions reach a deal to appoint a new central bank governor.
Quarterly Trades
Oil prices are down 16.5% on average this quarter, about to mark the second successive weekly loss.
Chinese Demand
A memo released by Goldman Sachs predicted a sharp slowdown in Chinese demand on oil as the economy shifts more towards natural gas and EV car usage.
- Fed Chair Powell speaks later today
- Markets await more evidence on US rate cuts
Bitcoin fell on Monday and extended the losses for the second session away from two-month highs on profit-taking, as the odds of a 0.5% US interest rate cut in November receded.
Now traders await Federal Reserve Chair Jerome Powell’s speech later today in Nashville, expected to provide clues on the future of US interest rates and policies.
The Price
Bitcoin fell 3.6% at Bitstamp today to $63259, with a session-high at $65,634.
On Sunday, bitcoin lost 0.5%, the first loss in four days away from two-month highs on Friday at $66508.
Bitcoin rose 3.25% last week, the third weekly profit in a row on hopes for new investments into the crypto market.
Crypto Market Value
The market value of cryptocurrencies fell by over $70 billion today to a total of $2.350 trillion as both bitcoin and ethereum sustained losses.
US Rates
Recent remarks by several Fed officials were more aggressive than expected.
Thus, the odds of a 0.5% Fed rate cut in November fell sharply from 54% to 41% according to the Fedwatch tool, with the odds of a 0.25% rate cut rising to 59%.
Later today, Federal Reserve Chair Jerome Powell is scheduled to speak in Nashville and will answer audience questions.
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