Markets:
- Gold down $8 to $1866
- WTI crude oil down $1.96 to $91.72
- US 10-year yields down 4.9 bps to 4.58%
- S&P 500 up 0.6%
- AUD leads, USD lags
Thursday was a reversal of the recent price action in markets but there wasn’t a particular catalyst. To be sure, the consumer spending data in Q2 GDP and pending homes were weak but my suspicions are on the looming turn of the calendar as the driver of price action on Thursday.
Bonds finally caught a bid after Europe went offline and that turned everything around. Stocks rose and the US dollar sold off. Even oil reversed its recent bulletproof record with a $2 decline.
The moves were largely uniform with the dollar falling around 0.6% but AUD/USD was particularly strong as it got some torque from risk appetite and perhaps some short covering. The loonie slide broadly alongside the US dollar as oil faded.
Yesterday was the T+2 deadline for Q3 books and so that might have been a culprit for the price action, or it could be some bottom fishing. As for the US dollar, it will have bigger issues to deal with in the day ahead with the looming PCE report and the rising probability of a government shutdown (and data blackout).