U.S. Indexes closed the final session of the week in the green, as did all sectors, with Consumer Discretionary and Materials the outperformers. The key risk event on Friday was the soft US Payrolls Report, as the headline underwhelmed, and the Unemployment rate rose, albeit as did the participation rate. Following the release, there was a notable dovish reaction with upside in US equity futures, US Treasuries, and spot gold, accompanied by downside in the Dollar. However, since the data print the moves have pared into weekend trade, where participants await any Middle East update. In the energy complex, which sparked initial downside, French President Macron confirmed that diesel and crude stocks would be released over 4 months, and G7 leaders confirmed the release of up to 100 million barrels of oil and diesel stocks. The September jobs report was soft, with just 29k jobs added, below the 90k consensus and the prior 133k, which was revised down from 162k. The net revision to July and August payrolls was -60k, suggesting that the labour market was not as strong as initially thought, and favourable seasonal dynamics may have supported the August release. Private payrolls slowed to 46k from 89k, with the prior revised down from 127k. The Unemployment rate also ticked up to 4.2% from 4.1%, alongside an increase in the participation rate to 61.8% from 61.6%. The weak headline payroll growth, rise in unemployment and negative revisions add to concerns around the labour market. However, the labour market has remained relatively robust, and Fed officials have largely characterised it as close to full employment. One report is therefore unlikely to completely change that assessment, particularly given the Fed’s emphasis on trends rather than individual data points. However, when accompanied by the downward revisions, the weakness is more notable. Pantheon Macroeconomics highlights that the three-month average of payroll growth now stands at just 51k, which it suggests is “probably slightly below the break-even pace”. Moreover, officials have been more focused on the inflation side of the dual mandate, meaning the September CPI report on October 14th will be key. Nonetheless, the jobs report likely cements expectations for an October pause, particularly following the softer August core PCE data and calls for patience from Williams and Jefferson, while Bowman favours no further hikes this year. Money Markets now assign just a 16% probability of an October hike, down from 24% on Thursday evening. Looking ahead, Pantheon expects the Fed to hold in October and notes December remains a close call but expects continued weakness in payrolls alongside slower services inflation to give the FOMC sufficient grounds to look through an anticipated rise in core goods inflation and keep policy unchanged. Fed Member Logan said policy rate needs to increase an additional 50 basis points or more, and that without higher rates, inflation will not get to the 2% goal. She added that policy is not sufficiently restrictive and needs to become modestly tighter, and that economic growth is gaining momentum, while the labour market remains well balanced. The hawk added that, at a minimum, several further rate hikes would reverse last autumn’s cuts and reiterated the Fed’s message that price stability must be restored. Added it remains uncertain how high the policy rate must go to bring inflation back towards 2%. Higher yields may partly reflect increased term premiums, which could lessen the need for additional policy tightening. Rising long-term yields suggest investors expect interest rates to remain higher and will continue monitoring bond-yield developments and evaluate their implications. Elsewhere, Oil closed higher by 1.75 while Gold reversed earlier gains to close Friday’s volatile session with a loss of 1%.
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For anyone following my Platinum Service it made 960 points on Friday and is now ahead by 960 points for October after ending September with a nice gain of 7767 points, after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a previous record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
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