Last week proved we are in the middle of a bear market as we closed the worst September for equity markets in twenty years. Stocks fell on the PCE Price Index release, which showed inflation is still accelerating. This means more interest rate hikes, especially with Fed board members hinting that tightening the monetary policy is ahead.
Still, the sentiment is so bad that any piece of positive news may spark a strong rally. Such an event may be the release of non-farm payrolls for September on Friday, October 7, at 12:30 UTC. The forecast is 250k, with an unemployment rate of 3.7%. Any divergence from the expectations may cause a bullish run or a sell-off if things are worse than we think.
On Tuesday at 3:30 a.m. UTC, the Reserve Bank of Australia is expected to raise the interest rates by 0.5%. The event should affect the AUD forex pairs and XAUAUD and XAGAUD.
Here are the top three assets you should observe this week.
Silver has been on a solid run all September, gaining 14.5%. On Monday, XAGAUD attacked a vital resistance level of 30 AUD per ounce, way above the two-year-low of 25.75 from September 1.
Silver has been outperforming gold recently. Trading the precious metal would be especially intriguing on Tuesday when the interest rate decision for the Australian dollar is made.
The index has broken the 11,000 support as the tech companies continue to slide. NDX100 has gone down 20% since mid-August. The rising cost of borrowing is affecting the growth stocks. Investors are in a risk-off mode, which opens even more downside for Nasdaq 100.
However, with the non-farm payrolls released on Friday, we may expect an increased price action. The Fed won’t change its policy, but September’s US unemployment data may swing the markets.
The stock listed on the London Stock Exchange went up 2.4% on Monday. The company announced that it’s negotiating with Hutchinson 3G Ltd a possible merger of Vodafone and Three mobile carriers.
If the deal comes through, the joint networks could gain scale and momentum to help you successfully through the 5G transition. With the UK economy in deep trouble, many stocks may be already undervalued. If you believe we are far from the bottom, today’s rally could be an excellent opportunity to short the stock. Watch out for how the talks roll out and trade accordingly.