Wednesday promised to be an interesting day of trading in the financial markets as a number of important developments are coinciding this week. Despite a senseless terror attack taking the lives of at least eight people in New York City late on Tuesday, markets in the U.S. and abroad were fairly calm this morning. A man drove a van through pedestrians and bikers in Lower Manhattan. The suspect, an Uzbek national that has been a U.S. resident for about seven years, has been taken into custody.
Gold was up about $5 to $1,275/oz early on Wednesday. The yellow metal trailed significantly behind its precious metal cousins, which joined a broader rally in commodities. Spot silver jumped over 1.5% (+26¢) to $16.95/oz. Platinum (+$14, +1.5%) and palladium (+$20, +2.05%) also rallied to $930/oz and $995/oz, respectively.
Industrial metals like nickel and copper surged Wednesday morning, and crude oil joined the party as WTI crude broke $55 per barrel. Despite all three of the other precious metals likewise advancing over 1%, the gold price was merely steady. Many traders are staying on the sidelines until this afternoon's conclusion of the Fed Open Market Committee (FOMC) meeting.
It seemed as though all asset classes woke up in positive territory this morning. The dollar was up more than 0.25% on the DXY index to 94.8. This knocked the yen past ¥114 and the euro closer to $1.16. Global stock indices were virtually all in the green. The 10-year Treasury also saw a rally that drove the benchmark yield down to 2.38%.
Bitcoin also hit a new record high, extending its winning streak to three straight sessions. The cryptocurrency traded as high as $6,600, spurred by the news that CME Group may introduce Bitcoin futures trading. (CME Group administers the COMEX.) This is being taken as a strong signal of institutional approval of Bitcoin, giving cryptocurrencies a new air of legitimacy.
Wednesday morning was also busy with economic data in the U.S. Consumer sentiment as measured by the Conference Board survey came in at its highest level in close to 17 years during October. This followed another gauge of consumer confidence hitting a 13-year high.
Meanwhile, investors got a preview of Friday's big nonfarm payrolls data on unemployment when ADP reported better-than-expected gains in private payrolls for October. 235,000 jobs were added in the private sector during the month, the best in nearly eight months. The jobs gains were felt across the board: hospitality services, health services, manufacturing, education, and construction all saw sizable growth. The new jobs were also fairly evenly spread across large-, small-, and medium-sized firms.
The much anticipated FOMC announcement comes this afternoon after the committee finishes meeting at 2 pm EST. The news will be somewhat overshadowed by President Trump's upcoming nomination for the next Fed chair—especially if the Fed forgoes an interest-rate hike. The president could choose to name a new vice chair at the same time.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.