There were no key US economic indicators released on Monday as government businesses observed the Columbus Day holiday.
In a speech, US president of the Chicago Federal Reserve, Charles Evans, said that there was a strong consensus amongst Fed officials to lift the federal funds policy rate to 4.5% by March and then hold it there: “We’re headed for this four and a half percent-ish federal funds rate by March.”
Meanwhile the US Federal Reserve vice-chair Lael Brainard said that “the actual path (of rates) will be data dependent”.
European sharemarkets eased on Friday as investors and traders awaited the start of the US profit-reporting season. Investors also were focussed on the Ukraine war with Reuters reporting that “Russia launched its most widespread air strikes since the start of the Ukraine war, in what President Vladimir Putin called revenge for the explosion on the Crimea bridge.” Stocks in Chinese-exposed luxury companies eased 1-2% as it was reported that Chinese spending weakened over the Golden Week holiday. The continent-wide FTSEurofirst 300 index fell by 0.4%. The UK FTSE 100 index lost 0.5%.
US sharemarkets were mixed on Monday in thin trade. Investors digested speeches from Federal Reserve officials. Also investors braced for the start of earnings season. The Philadelphia SE Semiconductor index fell by 3.4% to a 2-year low, after the Biden administration published a set of export controls on Friday, including a measure to cut China off from certain semiconductor chips made anywhere in the world with US equipment. After tracking a 475-point range, the Dow Jones index ended lower by 94 points or 0.3%. The S&P 500 index fell by 0.8%. And the Nasdaq index lost 110 points or 1.0%.
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The US government bond market was closed for the Columbus Day holiday. On Friday, US 10-year yields rose by 6 points to 3.89%. And US 2-year yields rose by 6 points to near 4.31%. Last week, US 10-year yields rose by 20 points with US 2-year yields up 11 points.
Major currencies were weaker against the US dollar in European and US trade. The Euro held between US$0.9685 and US$0.9735 and was near US$0.9705 at the US close. The Aussie dollar fell from highs near US63.40 cents to lows near US62.75 cents and was near US63.00 cents at the US close. And the Japanese yen eased from near 145.25 yen per US dollar to JPY145.80 and was near JPY145.70 at the US close.
Global oil prices fell by around 1.5% on Monday. Traders said that fears about a global recession outweighed prospects of tighter supply after OPEC+ cut production quotas. The Brent crude oil price fell by US$1.73 or 1.8%to US$96.19 a barrel. And the US Nymex crude oil price fell by US$1.51 or 1.6% to US$91.13 a barrel.
Base metal prices were weaker on the London Metal Exchange on Monday with lead down by 4.3%. But tin rose 3.6% and copper rose by 1.7%.
The gold futures price fell by US$34.10 an ounce or 2.0% to US$1,675.20 an ounce. Spot gold was trading near US$1,668 an ounce at the US close. Iron ore futures rose by US$1.73 or 1.8% to US$97.35 a tonne.
Originally published by CommSec
