It has been another volatile and undecided trading session yesterday.

OPEC did cut its oil production target by 2 million barrels per day. It was the biggest cut since 2020, it was expected, it saw a morose reaction by Joe Biden - who said it was ‘shortsighted’, but a well better enthusiasm than what I expected by the oil bulls.

The barrel of US crude ended the session 1.90% higher, yet, the 50-DMA offers haven’t been cleared just yet.

The World Trade Organization gave a scary forecast for the global trade next year. The WTO raised its trade growth estimate from 3 to 3.5% for this year, but they slashed their expectation for next year to 1%, from around 3-4%.

Yesterday, the investor sentiment was rather bearish. The major indices were under a decent selling pressure, following a strong two-day rally.

The data from the US was not very Fed-friendly, but it was ok. The ISM services index showed a faster than expected expansion in the US services sector, and the ADP report printed a slightly higher number than the expectations. Now all eyes are on Friday’s NFP number, and wages growth data.

In the FX, the dollar index rebounded, the EURUSD and Cable eased.

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Global equities, bonds, commodities and currencies rallied, as the US dollar eased further yesterday. Soft US JOLTS data, and softer-than-expected Reserve Bank of Australia (RBA) hike sent a wave of optimism across the global markets. But the downside risks persist with further US jobs data due today, and OPEC – which may announce a big cut in oil production.

The US dollar index slid to 110 mark, the EURUSD advanced to parity, and Cable advanced to 1.1490. The USDCAD fell to the 1.35 on the back of softer US dollar and firmer oil.

In commodities, gold tested the 50-DMA to the upside ($1730 per ounce,) while Bitcoin consolidated above the $20K mark.

Today, the ADP report is expected to print 200’000 new private job additions in the US. A soft figure is what every investor is secretly praying for.

In oil, according to the latest reports, OPEC could announce cutting oil output by 2 million barrels today. But, a big decline in OPEC supplies may not necessarily trigger a further price rally, as higher the energy prices, the sharper the central banks must kill demand to pull the prices lower.

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The new week, the new month and the new quarter kicked off on a volatile, but a positive note. Credit Suisse closed a very ugly session with 0.90% loss only.

European indices gained, while the US indices rallied as softer-than-expected US ISM manufacturing index gave a positive spin to the market.

The Dow Jones jumped the most on Monday, as oil stocks literally roared on the back of firmer oil prices. Oil bulls are betting that OPEC will announce an output cut of around a million barrels per day to ‘stabilize’ oil prices.

In the FX, the US dollar retreat almost 3% since its September peak. The dollar lost more than 4.50% against the Brazilian real, as Cable rallied past the 1.13 level, after Liz Truss government took a ‘mini’ step back from their terribly unpopular fiscal spending plan, and said that they will not reduce taxes on big salaries

Elsewhere, the Reserve Bank of Australia lifted its interest rates by 25bp only, versus 50bp expected by analysts.

Today, we will be watching the job openings data in the US, and hope to see a smaller number, as the Fed sees the job openings as a factor that could ease the pressure in the US jobs market.

Then, will follow the ADP report on Wednesday, and the NFP, unemployment rate and the wages growth on Friday. Investors are praying for softish numbers this week to continue the rally.

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We spent the weekend talking about whether Credit Suisse will finally go bust or not. The share price is down below 4 francs a share, and the credit default swaps are going through the roof. The 5-year CDS for Credit Suisse spiked to 250 from around 60 at the start of the year. It means that the market is aggressively pricing a default for one of the biggest Swiss banks.

Is it possible? Yes, it is possible, but it is highly unlikely.

Zooming out, the third quarter ends with losses, even though we thought that the summer rally could’ve given something. But no.

The S&P500 finished the 3rd quarter having slipped to the lowest levels this year. The same is true for Nasdaq and the Dow Jones. $24 trillion have been wiped out of the stocks so far this year.

And the last quarter begins with aggressive rate hike expectations from the Federal Reserve (Fed), but also from the European Central Bank (ECB) and the Bank of England (BoE) to fight inflation and the dollar strength.

Nike has been the latest company warning investors of falling profits due to mountains of stockpiles that they inherited from the pandemic times – and which brought the company to make nice price discounts -, and the strong dollar.

This week, we will watch how Tesla will react to the latest delivery report, the OPEC decision and the US jobs figures… and hope that this week’s jobs data doesn’t reveal strong job additions, and solid salary growth in the US.

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It was a terribly ugly day across the equity and bond markets yesterday.

Despite the financial calamity, Porsche had a successful IPO and secured the valuation it was looking for, but the S&P500 plunged another 2% yesterday and wiped out the summer gains entirely. The same is true for Nasdaq. Nothing is left from the summer rally in the US stocks.

Apple dived more than 6% and closed the session almost 5% lower yesterday, after Bank of America downgraded the stock on worries of weaker consumer demand.

Facebook’s Meta joined the others in announcing job cuts.

But **unfortunately** for the Federal Reserve (Fed), the US jobless claims came below 200’000 last week. There are not enough people losing their jobs to stop the financial bleeding in the world.

One interesting thing about yesterday’s price action was that... the US dollar sharply eased despite the hawkish messages thrown to our faces by the pitiless Fed members.

The British pound recovered above the 1.11 mark against the US dollar yesterday. Could the pound rebound sustainably, or is this just a fake alert?

The Bank of England (BoE) jumped in the UK’s shattered sovereign market to buy long-term UK bonds yesterday, because apparently, they have been warned that collateral calls on Wednesday afternoon could force investors to further dump their UK sovereign holdings. And the UK could no longer afford another heavy selloff wave on its sovereigns.

The British 10-year yield fell 10% yesterday, and the pound jumped past the 1.08 mark against the US dollar and consolidated below 0.90 against the euro.

The FTSE recovered early losses and closed the session 0.30% higher, gold recovered to $1662 an ounce, American crude rallied past the $80 per barrel, also boosted by the Hurricane Ian’s negative impact on supply. Around 11% of the Gulf of Mexico production was halted due to the storm.

The S&P500 gained almost 2% yesterday to above 3700 level, while Nasdaq jumped more than 2%.

Will the enthusiasm last? Not so sure. Yesterday’s price action was a sugar rush, triggered by the BoE intervention. Enthusiasm will likely fall as the level of blood sugar falls across the financial markets.

Amazon jumped 3% as investors liked the new devices at Wednesday’s annual device event, and Apple slipped on announcement that it will, finally, not produce more iPhones compared to last years.

In Europe, all eyes are on Porsche that starts flying with its own wings today!

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The Russian natural gas is now bubbling somewhere in the Baltic Sea, being wasted in front of the horrified eyes of hundreds of millions of Europeans suffering from a historical energy crisis.

The European natural gas prices jumped 17% yesterday, while crude oil gained 2.30% on news that Russia now wants OPEC+ to cut output as deadlines to implement Russian fuel bans approach. .

Plus, if the escalation on the energy front is not enough, governments of the four Moscow-occupied areas of Ukraine have all declared victories in the referendums with, of course, an unprecedented majority of residents saying YES to joining Russia.

The mounting tensions with Ukraine and the spike in nat gas prices fuel the European inflation expectations, but in vain. The EURUSD is pushing lower against the US dollar as recession worries mount.

The pound remains under a decent selling pressure as the Bank of England (BoE) officials are pushing the can down a very steep road, saying that it’s more appropriate to wait 5 WEEKS before taking action.

Even the safe haven assets are out of action right now. The dollar-swissy is about to test parity, as gold pushes lower as the dollar extends rally, and US yields rise.

The Fed officials make sure no one breath. But it is well possible that after having wrongly insisted that inflation was ‘transitory’, the Federal Reserve (Fed) could now making a second Big Policy Mistake of tightening beyond-appropriate.

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We had a bearish start to the week on Monday and the price action across several asset classes remains volatile and chaotic - and that’s especially true for the FX markets shaken by the freefall in sterling.

The US dollar remains king, on the back of a heavy sterling meltdown due to irresponsible UK government / lazy Bank of England (BoE), and euro selloff on the back of Italy turning right / cautious European Central Bank.

The USDJPY spiked at yesterday’s dollar rally, as if the Bank of Japan (BoJ) never intervened last week. The BoJ head says that he supports intervention in the yen. In vain.

Equities selloff, as investors expect a deeper downside move due to pressured earnings. Tech stocks remain on the chopping block. To reverse sentiment, Amazon throws the second Prime Day sale this year, and Apple hurries out of China.

While outlook for equities remains bearish, the rising yields make sovereign markets increasingly appetizing, and an eventual inflows in global sovereign markets could be the first sign of healing from the actual financial crisis.

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The FX markets kick off the week on an extremely chaotic note. Both the pound and the euro are being severely punished for the political decisions that are taken in the UK and in Italy respectively.

As expected, the far-right candidate Giorgia Meloni won a clear majority in Italy at yesterday’s election, with Brothers of Italy gaining more than 25% of the votes. And Meloni’s right-wing alliance with Salvini’s League and Berlusconi’s Forza Italia got around 43% of the votes: the terrible consequence of the pandemic, the war and the energy crisis.

The EURUSD has been shattered this morning. The pair dived to 0.9550.

But it’s almost worst across the Channel, if that’s any consolation. Investors really hated the ‘mini budget’ announced in UK last Friday. Investors were expecting to hear about a huge spending package from Liz Truss government, but the package has been even HUGER than the market expectations.

UK’s 10-year yield jumped more than 20% since last week, the FTSE dived near 2% and Cable tanked below 1.0350 in Asia this morning.

Elsewhere, the US dollar index took a lift, and the dollar index is just crossing above the 114 mark at the time of talking.

Gold dived to $1626 on the back of soaring US dollar.

US crude oil plunged below $80 per barrel.

The S&P500 fell to the lowest levels since this summer, whereas the Dow Jones fell below the summer dip.

Happily, the European equities are better bid this morning, but investors remain tense and worried.

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A busy week for central banks come to an end with plenty of rate hikes, increased prospects of slowing growth, that leave investors with a bad taste in their mouth.

The Swedish Riksbank was the first major central bank to surprise with a 100bp rate hike.

The US Federal Reserve (Fed) delivered its third 75bp hike. But the dot plot hinted at another jumbo hike before the year-end.

The Bank of Japan (BoJ) maintained its policy rate unchanged at -0.10%, but intervened directly in the FX market to buy yen to fight back the strengthening dollar.

The Swiss National Bank (SNB) raised its policy rate by 75bp.

The Bank of England (BoE) opted for a 50bp hike, combined with an £80 billion Quantitative Tightening, and said the UK is now in recession. The UK will reveal the ‘mini’ budget today.

Norges Bank also increased its policy rate by 50bp but signaled that tightening may be coming to an end. Indonesia and the Philippines also hiked by 50bp. Taiwan raised by a modest 12.5% as expected, Vietnam opted for a 100bp hike, South Africa raised by 75bp…

…and Turkey… cut its rate by 100bp for the second consecutive month!

But the week is not over. The Italian elections due Sunday will likely continue pressuring the euro lower.

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