Stock Market Drops After FOMC Speech But Jumps Up After China Talks

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The stock market dropped overnight, but jumped up in early morning trading after positive news of the China trade talks.

The U.S. Treasuries plummeted during Wednesday’s afternoon session despite a speech by Federal Open Market Committee (FOMC) Chair Jerome Powell, delivered late yesterday, where he concluded to expand the size of the balance sheet very soon.

However, investors will eye anther speech from him today, besides, the JOLTs job openings data for the month of August, scheduled to be released today by 14:00GMT and the FOMC’s October meeting minutes, due at 18:00GMT for further direction in the debt markets.

The yield on the benchmark 10-year Treasury yield surged nearly 2 basis points to 1.556 percent, the super-long 30-year bond yield also gained 1-1/2 basis points to 2.057 percent and the yield on the short-term 2-year traded a tad above 1 basis point up at 1.437 percent by 12:05GMT.

Further clues about the path ahead for Fed policy might emerge from the minutes of last month’s FOMC meeting, due later today. Before then, Powell will be speaking publicly again, this time at a ‘Fed Listens’ event in Kansas City, Daiwa Capital Markets reported.

Today’s dataflow from the major economies is also concentrated in the US, where the August JOLTS jobs numbers as well as wholesale trade and inventories figures, as well as the September Fed monthly budget statement are due, the report added.

Meanwhile, the S&P 500 Futures suffered -0.62 percent to trade at 2,919.62 by 12:10GMT.

The German bunds plunged during European session Wednesday as investors await the country’s trade balance data for the month of August, scheduled to be released on October 10 by 06:00GMT and the consumer price inflation (CPI) for the month of September, due for release on the following day by 06:00GMT for further direction in the debt market.

The German 10-year bond yield, which move inversely to its price, jumped 3 basis points to -0.566 percent, the yield on 30-year note surged 4 basis points to -0.071 percent and the yield on short-term 2-year traded nearly 1 basis point higher at -0.757 percent by 10:40GMT.

Consistent with the September PMIs, today’s Bank of France business sentiment survey signalled a loss of momentum at the end of the third quarter, particularly in the manufacturing sector, Daiwa Capital Markets reported.

Indeed, the headline index fell 3pts to 96, reflecting a drop in production that month, particularly in the manufacturing of machinery and electronic equipment. Nevertheless, with order books having improved slightly manufacturers anticipated a pickup in production in October.

And on average over the third quarter as a whole, the manufacturing sentiment index was only ½pt lower than the Q2 average. In the survey, services firms also suggested that activity slowed slightly in September, although the headline index at 99 remained close to the long-run average and still left the quarterly index unchanged from Q2 at 100, the report added.

And construction firms were a touch more upbeat about recent conditions in the sector, with the respective headline index rising 1pt to 105, a four-month high, Daiwa further noted in the report.

Meanwhile, the German DAX traded over 1.00 percent up at 12,090.96 by 10:45GMT.

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Source: PressCable

Release ID: 88926777