Dollar Peaks Since March as US Yields Rise

The dollar surged to its highest since March as US Treasury yields increased. This comes amidst expectations that interest rates might stay high, even if the Federal Reserve pauses its rate hike this month. Ten-year US yields jumped seven basis points to 4.25%, and the S&P 500 hovered around 4,500 points. Leading performances in the Nasdaq 100 were by Tesla and Netflix, while Brent crude hovered around $90 a barrel due to OPEC+ sustained supply cuts.

Federal Reserve’s Waller hinted at a cautious approach to interest rate hikes due to easing inflation trends. Concurrently, Cleveland’s Fed President, Loretta Mester, believes rates might need a slight increase. Goldman Sachs lowered the recession likelihood for the US to 15% from 20% earlier, indicating that the Fed might not need to raise rates further. Despite September being historically weak for US stocks, positive indicators and past trends suggest the S&P 500 might see an 8% increase by the end of 2023.

Corporate Updates:

• Blackstone and Airbnb stocks rose on their forthcoming addition to the S&P 500.
• Oracle shares climbed post Barclays’ upgrade.
• Manchester United shares dropped following reports of the Glazer family withdrawing the club’s sale due to insufficient offers.
• Illumina announced Jacob Thaysen as its new CEO, succeeding Francis deSouza.
• Arm Holdings’ planned IPO might not achieve its anticipated valuation.
• Country Gardens Holdings avoided its first default, providing relief amid financial market turbulence in China.
• Workers at Chevron Corp.’sAustralian LNG plants may disrupt global fuel supply over disputes.

Notable Events This Week:

• Eurozone retail sales and Germany’s factory orders on Wednesday.
• Canada’s rate decision, US trade details, and comments from various Fed officials throughout the week.
• Reports on China’s trade, Eurozone GDP, and US jobless claims are expected on Thursday, followed by Japan’s GDP and Germany’s CPI on Friday.