FX Careers

General Market Analysis | 7th November 2023

Markets Reset as Bond Yields Rise

Global markets took a bit of a breather yesterday to assess their next moves after a huge week. US Stock markets closed the day slightly higher as last week’s euphoria dissipated a bit as investors await updates from key Fed members later in the week, the Dow finished up 0.10%, the S&P 0.18% and the Nasdaq added 0.30%. Bond yields were the main movers with the 10-year rising 10 basis points to 4.65% and the 2-years adding a similar amount to trade up to 4.94%. The dollar moved up against most of the majors and Gold, whereas Oil rose against the greenback as the Saudis and Russians confirmed production limits.

All Eyes on the Fed……… Again

US stock markets had a stellar week last week as rate hike expectations fell after a more dovish than expected Fed meeting and weaker job numbers. The Nasdaq finished up 6.61% on the week and the S&P was not far behind, gaining 5.85%. However, yesterday saw a bit of a calmer day for the market and many investors are looking ahead to some key speeches from Fed officials mainly from the Fed Chair Jerome Powell. We’ve seen this pattern before and if we hear any more hawkish leanings from the FOMC in general and Jay Powell in particular then expect the moves of the last few days to reverse.

Central Banks in Focus Today

It is a central bank-heavy trading day for investors today with a major rate decision due earlier in the day and some key players talking as we move through the sessions. The Reserve Bank of Australia is set to give the market another rate hike today midway through the Asian session and traders will be analyzing the statement closely to see if this looks like being the final one in this cycle. There is little on the data front for both the European and US trading sessions but we have four separate FOMC members speaking and traders will be looking at what is being said very closely given the moves we have seen since last week’s rate call.