This week, the macroeconomic calendar was relatively quiet. But who said the market is driven solely by reports? Geopolitics, US internal strife (shutdown!), and elections stepped into the game, flipping traditional scenarios upside down. Perhaps the only significant scheduled news came from the RBNZ meeting.
So, what moved the key assets and why? Let's break it down:
What happened: The New Zealand Dollar hit a six-month low against the USD, touching 0.5731.
The reason: The Reserve Bank of New Zealand (RBNZ) slashed its interest rate by a full 50 basis points, when most analysts expected only 25. Furthermore, the central bank clearly signaled readiness for further monetary easing. This wasn't just a "dovish" but an "ultra-dovish" scenario!
Trader's Takeaway: The market hates surprises, especially "ultra" ones. Underestimating a central bank's aggressiveness always leads to sharp moves. Watch for these "exceptions to the rule" in regulatory statements.
What happened: Brent prices have already dropped over 10% this year, with August and September seeing consecutive monthly declines. Last week, an 8% loss pushed quotes to around $65.80.
The reason: A projected excess of supply over demand. This is due not only to the gradual easing of OPEC+ quotas but also to competitors ramping up production. The market is anticipating decisions from the cartel, but sentiment remains bearish.
Trader's Takeaway: Until OPEC+ signals a sharp cut, any rebound might be temporary. Be ready for continued downward pressure.
What happened: Gold prices surged above $4000 per ounce for the first time ever, hitting an all-time high of $4059.34! A slight pullback followed ($4039.34).
Reason for the surge: Massive concerns about US economic stability (shutdown!), the government funding crisis in Washington, and escalating geopolitical tensions. Gold is a traditional "safe haven" during instability.
Reason for the retreat: News suggesting a potential truce in the Middle East.
Trader's Takeaway: Gold is the perfect market nervousness indicator. Keep a close eye on geopolitics and the US situation. Any escalation is a potential catalyst for the metal.
What happened: The Dollar unexpectedly strengthened against the Euro and Pound, shrugging off the shutdown. The Euro weakened due to internal politics.
Reason for USD strength: Fed Chair Powell clearly stated rate decisions hinge on macro data. But with the shutdown, that data isn't coming! Then, Fed officials promptly declared: cutting rates during a shutdown would be inappropriate. The market took this as a signal that rate cuts are off the table for now, supporting the Dollar.
Reason for EUR weakness: Political crisis in France. Parliament dissolution, potential Macron resignation, and government reshuffles (fifth PM in two years!) — these are direct signals of instability hitting the Euro hard.
Trader's Takeaway: Politics and institutional statements can outweigh even obvious economic problems. The Dollar remains "king of the hill" amid rate clarity, while the Euro is under pressure from political turmoil.
What happened: The Pound traded lower, hitting support at 1.3369, despite a lack of clear economic reasons.
The reason: Most likely, the general weakness of European currencies amid the Eurozone crisis (especially France) and the Dollar's strength dragged the Pound down "by association." Sometimes markets move not by direct logic, but by "neighboring" sentiment.
Trader's Takeaway: Pay close attention to correlations. Sometimes your asset falls not by its own fault, but because a "neighbor" is in trouble.
What happened: Sanae Takaichi's victory in the Liberal Democratic Party leadership race caused a stir: the Nikkei 225 surged, and USD/JPY reached its highest level since February.
The reason: Takaichi's close allies advocate postponing monetary policy normalization until December, not October. This means more cheap money in Japan for longer, traditionally weakening the Yen and supporting the stock market.
Trader's Takeaway: Political elections are always a risk and an opportunity. A shift in monetary policy rhetoric is a direct factor influencing currency.
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