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The USD/PLN pair noticeably declined during the volatile morning hours on Wednesday following a rather unexpected rate hike by the Polish central bank, raising rates by 40 basis points. It was also reported that the central bank is making plans to purchase at least 100 tonnes of gold over the coming years in order prepare for unfavourable scenarios.
Gold and silver traded only marginally higher on Wednesday, while platinum prices traded significantly higher and thus offsetting the losses from the beginning of the week.
The rally in crypto markets and Bitcoin in particular continued with the biggest crypto by market cap trading at times above $55k, while Ethereum was above $3.6k for the first time in more than two weeks. The rising BTC dominance now estimated above 43% showcases that Bitcoin is leading the rally among the major coins. A blowout performance in the Shiba Inu coin over the past days however pushed its price on a weekly basis up by more than 300%, roughly ten times more than the gains in Bitcoin.
While major U.S. market indices benefitted from advanced the discussions among lawmakers to raise the debt ceiling, major indices in other regions like Europe and Asia were still facing pressure. The Italy 40 index retraced by more than one per cent after the relatively strong performance at the beginning of the week, while some Asian indices like the Japan 225 (Yen) down by around 1.7% or the Korea 200 down by 1.48% traded with even bigger losses.
The strength of the dollar pushed the EUR/USD pair to a new low since July 2020 with the pair only reversing the intraday downtrend after touching as low as 1.153. The downwards move has to be however also at least in part to be attributed to the weakness of the euro as among all major EUR-FX pairs on Wednesday the EUR/NZD was up, while all the others traded lower.
Data seen from Europe was rather disappointing with the German manufacturers’ orders falling by 7.7% on a monthly basis in August, while EU retail sales performance was also weaker than anticipated being flat on an annualised basis. The ADP employment Report from the U.S. on the other hand looked more positive in September than in the previous month with the added 568 thousand payrolls exceeding both the results from August and set expectations of only moderate gains.
European stock market indices traded unlike their U.S. counterparts overall lower on Wednesday and even after the gains in the afternoon indices like the Europe 50 were unable to recover all the losses from the night and morning hours.
The Deutsche Telekom (-5.43%) stock was one of the worst performers among European blue chips on Wednesday after it was reported that Goldman Sachs offered to sell around 90 million Deutsche Telekom shares following a financing deal with Softbank.
On Thursday German industrial production data will be published, followed by the French trade balance and Italian retail sales statistics.
After rising to a new multi-year high over the past days, oil and other energy commodity prices strongly retraced lower on Wednesday. Even the movement around the normally relatively important weekly inventory data by the Energy Information Administration (EIA), which indicated a build in both crude oil and gasoline stockpiles of 2.3 and 3.3 million barrels respectively did not make a significant dent in the ongoing downtrend that day. The change in inventories was even somewhat higher, than the surprise build numbers presented by the American Petroleum Institute (API) one day earlier. Extreme volatility could be observed in the natural gas market with the Natural Gas CFD plummeting even faster on Tuesday than the gains attained on Tuesday, closing at the end of the day down by close to nine per cent.
Multiple factors likely came together allowing for energy prices to come down from the recent high, such as Russia’s President Putin promising more gas deliveries to Europe through the existing pipeline going via Ukraine. From the U.S. the Financial Times reports that key officials are considering releasing stored fuels from the strategic energy reserve to bring down prices, while in China Australian coal that was still stuck in ports as a result of political disagreements between the two countries was reported to have been processed.
Major stock market indices like the US 500 closed higher on Wednesday for the second day in a row. A further upside by Wednesday morning made sure that the index performance is now seen in the green on a weekly basis. The market sentiment improved over progress seen among U.S. lawmakers making headway towards an agreement lifting the debt ceiling.
Moderna (-9.04%) was the worst performing stock on Wednesday, that is included in both the S&P 500 and the NASDAQ Composite Index, while its key competitor in the mRNA COVID vaccine game BioNTech (-5.77%) also closed with significant losses. Moderna stocks could have been impacted by the recent interim decision of Sweden, Norway and Denmark to halt the use of its vaccines among younger people, due to concerns about side-effects especially in those age groups.
Electronic Arts (-6.94%) also closed significantly lower, with reports about bugs in its highly anticipated battlefield 2042 game among beta testers just a bit more than a month to the scheduled launch date are seen as a source of concern for investors.
On Thursday companies including ConAgra and Tilray are set to release their quarterly results.
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