The Saturday attack by Hamas on Israel caused oil prices to surge several percent on Monday morning. Over time, the rate of increase slightly declined and around 10:00 am it stood at +2.78 percent for WTI on NYMEX, and +2.41 percent for Brent on ICE. The price of gold contracts on the COMEX, which hit the lowest point since March last week, jumped about 1 percent this morning. The price of natural gas contracts on NYMEX, which broke past local highs from the last 7 months last week, rose around 1.68 percent around 10:00 am and was the highest since January.
Friday’s US labor market report was surprisingly strong. The number of new jobs in the non-agricultural sector increased to 336,000 (170,000 expected). The August result was revised upwards from 187,000 to 227,000. The unemployment rate remained at the same level of 3.8 percent.
Michelle Bowman from the FED reiterated her view that inflation is still too high despite “significant” progress in its reduction and the Fed is likely to have to tighten monetary policy further. The Fed Fund futures contracts price an 18% chance of a 25-bp rate hike in November and a total of 38% by December.
The exchange rate of the US dollar to the Israeli shekel rose to its highest level since 2016. The USD rate against the Turkish lira reached a historic high today. After three sessions of gains, the EUR/USD rate fell about 0.64 percent around 10:05 am. The USD/JPY rate, which was shot down last week by suspected intervention from the first level over 150 JPY in a year, stubbornly sticks slightly below this barrier (today around 10:10 am -0.12 percent).
The Polish zloty slightly weakened this morning (EUR/PLN +0.1 percent, USD/PLN +0.7 percent around 10:10 am).
Bitcoin against the US dollar fell below the level of 28000 USD (-0.36 percent around 10:25 am).
The Israeli stock market index TA-35 dropped by 6.5 percent on Sunday to around its local lows from the beginning of the year, and its decline this morning was small.
On Friday, following labor data in the US, S&P 500 and DJIA rose to their highest levels in a week (S&P 500 +1.18 percent, DJIA +0.87 percent), and Nasdaq 100 (+1.7 percent) reached its highest level in over 2 weeks. Today around 10:10 am contracts on the main indexes of the US stock market were down 0.7-0.9 percent.
The main indices in Europe also fell at the beginning of the new week (DAX -0.77 percent, CAC 40 -0.75 percent around 10:25 am).
However, the Warsaw Stock Exchange performed relatively well (WIG-20 +0.94 percent around 10:40 am). The share price of Cyfrowy Polsat was the lowest since 2012. Among the components of mWIG 40 and sWIG 80, Grenevia, Sunex, and Photon Energy NV reached their new historical lows, while the price of Auto Partner shares was the highest in its history.
Author: Wojciech Białek, OANDA TMS Brokers.
