Wake‑up Call: Crude’s Deep Dive
The oil market flickered just like a shy frog this past Monday. WTI slammed its biggest single‑day drop in over two years, and Brent also took a nosedive, dropping 6% – the steepest loss since August 2022. The roast? Some rocky geopolitics finally cooled in the Middle East, and that “risk premium” that had been cushioning prices has gone evaporate. Short‑term, the bears win because poor demand outlooks are still playing the blame game.
JP¥‑Jedi‑Science: Japan’s Political Shuffle
Japan’s leading party lost its majority in the latest election, so the new coalition will be bargaining like it’s on a midnight TV show – no predictable ending yet. The JP¥ slid under 1%, pulling USD/JPY above 153, a level first breached since July. Bank of Japan might hold its hand off for now, taking a breather before possibly tightening policy. For now, the Nikkei’s little rally feels more like a shrug than a stride, hoping for a clearer government lineup.
Middle East In A Calm-Down Mode
Israel’s latest strikes aimed at military bases, staying away from oil, energy, or nuclear spots – a polite “just to keep sweat high” move. That’s why the market’s risk premium shrank, and crude didn’t feel the safety net it used to.
Equities & Treasury: Mixed Emotions
- S&P 500 stumbled in a modest 0.3% pop while NASDAQ held ground. The only bright spot is the year‑to‑date 22% climb – the sharpest for the past six election cycles.
- Treasury auctions slipped: the 2‑year pulled by 0.8bp and the 5‑year slid 1.6bp. A sign that 7‑year supplies might get the short end of the bell.
- US dollar stayed above 104 and its 200‑day moving average, stretching out for more gains as “US exceptionalism” keeps ringing through the Q3 GDP news.
What’s Sizzling Tomorrow
Friday’s a heavy‑hit list: all eyes on September’s JOLTS (should hold steady around 8 million openings), the next Conference Board consumer confidence coming in at 99.5, and Fed moves that could swing market expectations.
Earnings Explosion: “Magnificent Seven” Spill
- Alphabet (Google) leads the show. Their shares jittered ±5.5% after hours – the market’s got their back (or their critique).
- McDonald’s fresh off an E. coli scare; watch the numbers. AMD might give a spoiler for AI‑heavy stocks like Nvidia, who are off the chart for a week.
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