US Government shutdown drama

Once again, the US Government is facing a potential shutdown, as early as October 1st , in our report yesterday we had stated that the Senate was working on a bipartisan stopgap bill, which would have allowed the House of Representatives more time to reach an agreement on a Government spending bill. However, House Speaker McCarthy stated yesterday that “I DO NOT SEE HOUSE SUPPORT FOR THE SENATE FUNDING BILL”, implying that the US Government may actually shutdown , as there may be not enough time for another bill to pass both the Senate and the House, if the current Senate proposal fails.On another note, Minneapolis Fed President Kashkari stated yesterday that “we might not be as restrictive as we think” , implying that the bank may have to raise rates higher, after the essay he had released on Monday, stated two primary scenarios for the Fed moving forward, in which both scenarios, may require another rate hike. In the commodities markets, we note that Oil has continued its upwards trajectory, following the release of US crude oil inventories figure, which was indicative of a greater than expected decrease in crude oil inventories, implying that demand for oil remains tight. Furthermore, on a more macro-fundamental level, with the reduction in inventories and the OPEC+ production cut being extended until the end of the year, we may see further constraints on the supply of the liquid gold whilst demand remains elevated, thus potentially nearing the $100 per barrel figure, that has been touted by market analysts. Over in Asia, the Chinese troubled property developer Evergrande had its shares suspended once again according to a report by FT, after only having been resumed last month. According to report from Bloomberg, the company’s CEO has been placed under police surveillance, further fuelling doubt about the company’s future.

XAU/USD appears to be moving in a downwards fashion, with the commodity having broken below the $1900 key psychological level. We tend to maintain a bearish outlook for the commodity and supporting our case is the RSI indicator below our 4-Hour chart which currently registers a figure below 30, implying a strong bearish market sentiment. Yet, the RSI indicator could also imply that the commodity is oversold and may be due a market correction to higher ground. Nonetheless, for our bearish outlook to continue, we would like to see a clear break below the 1855 (S1) support level, with the next possible target for the bears being the 1830 (S2) support base. On the other hand, for a bullish outlook, we would like to see a clear break above the 1885 (R1) resistance level, with the next possible target for the bulls being the 1915 (R2) resistance level.

WTICash appears to be moving in an upwards fashion, with the commodity aiming for the 94.00 (R1) resistance level. We maintain a bullish outlook for the liquid gold and supporting our case the RSI indicator below our 4-Hour chart, currently registering a figure of 70 implying a bullish market sentiment. For our bullish outlook, to continue, we would like to see a clear break above the 94.00 (R1) resistance level, with the next possible target for the bulls being the 97.70 (R2) resistance ceiling. On the other hand, for a bearish outlook we would like to see a clear break below the 91.60 (S1) support level with the next possible target for the bears being the 88.50 (S2) support base.

その他の注目材料

In today’s European session, we note the Eurozone’s final consumer confidence figure for September, followed by Canada’s business barometer figure for September, Germany’s preliminary CPI rates for September, the US final GDP rates for Q2, the weekly initial jobless claims figure. In tomorrow’s Asian session, we note Japan’s Tokyo CPI rates for September, unemployment rate for August and their preliminary industrial output for August. Lastly on a monetary note, we highlight the speeches by ECB Enria and McCaul during today’s European session and later on during the American session, the speeches by Chicago Fed President Goolsbee and Fed Chair Powell. In tomorrow’s Asian session, we note Richmond Fed President Barkin is due to speak.