The stock markets both on and off the Atlantic were also increasingly under the grip of oil prices and bond yields in the past trading days. Together, these two factors currently determine the oxygen supply to the stock markets. Despite an sluggish economic calendar, there were periodic signals, such as from purchasing managers and the Fed minutes, that were nevertheless important. Now, the markets are likely to look increasingly towards the report season in the US, which is gaining momentum.
DAX
ISM purchasing managers for manufacturing and services remain above the 50-point growth threshold
According to the data from Monday, the ISM Purchasing Managers' Index (PMI) for the services sector fell slightly below expectations at 54.9 points (55 points), after economists had previously expected 55.4 points.
The mood in the US manufacturing sector, however, stood at 54.5 points, also below expectations (55 points). These data were already released the week before. However, both values still remain above the 50-point growth threshold.
Dow Jones Industrial Average Index
Interest rate pause at October meeting still possible – minutes show discord within the Fed ranks
According to the CME Group’s “Fed Watch Tool,“ currently 80.6 percent of market participants expect a pause in interest rates at the meeting on October 28, and 19.4 percent expect an increase in interest rates, totaling a quarter of a percentage point. A week ago, 22.1 percent still expected an increase in interest rates of this magnitude.
The Fed minutes published late on Wednesday evening have highlighted the disagreement within the Fed over inflation, the economic situation, and the future monetary policy course. The members presented opposing arguments for the interest rate hike. While one side tended to be proactive, the other side saw this as a change in course towards more restrictive monetary policy.
Weekly initial applications for U.S. unemployment benefits remain stable – Consumer confidence in focus
In contrast, initial applications for U.S. unemployment benefits declined by only 2,000 units last week to 197,000, as the U.S. Department of Labor communicated on Thursday. Experts had expected 200,000 applications on average. At the same time, the figure from the previous week was revised upward by 2,000 to 199,000 units. Overall, initial applications remain at a rather low level, which could indicate a stable labor market, not least.
However, the official US non-farm payrolls report for September was significantly weaker than expected. The unemployment rate also climbed by 0.1 percentage points to 4.2 percent.
Before the end of the week, investors are still awaiting preliminary data on consumer confidence (University of Michigan) at 16:00.
