Today, Monday, October 4, marks the beginning of the last quarter of the year, and of a new trading week. The new month begins with an energy crisis in Europe and China, tensions caused by the lack of oil supplies as well as updates on the Evergrande crisis.
Winter is Coming and The OPEC is Aware
Today, OPEC+ is scheduled to meet to discuss oil production levels for the coming months. According to market watchers, OPEC+ could consider increasing its November production by more than the 400,000 barrels per day they had planned.
The oil market has tightened significantly in recent weeks, and this may be explained by the post-pandemic economic recovery, as well as the slowdown in crude oil production in the Gulf of Mexico caused by Hurricane Ida.
West Texas Intermediate is trading around $75 a barrel, and Brent around $79 at the time of writing. Both oils closed with new highs for the week on Friday. OPEC models expect demand to outstrip supply before the end of the year. In addition, winter another factor that could increase demand, is approaching.
Investors are likely to be watching the OPEC+ meeting taking place today closely as it could affect the liquid gold’s prices.
The Merging of two Giants
Cailian, one of China’s digital information platforms, has published that the Chu family – the owner of Hopson Development Holdings Ltd. – plans to acquire a 51% stake in Evergrande Property Services.
The information reported by the Chinese news website has not been confirmed by the companies involved. This week, the mainland Chinese markets are closed until Thursday due to the nation’s Golden Week celebrations. However, the trading of Evergrande and Hopson’s shares have been suspended in Hong Kong.
The Chu family is one of the richest families in the country and owns 71% of Hopson Development. In addition, the family is worth about $6.2 billion according to the Bloomberg Billionaires Index. Based on its market capitalization, Hopson is the 13th largest real estate company in China.
Precious Metals, A Small Rally for Gold?
Amid inflationary pressures and a weaker dollar, gold experienced a rally on Friday. The Federal Reserve’s (Fed) announcements on tapering and interest rate hikes did not prevent the yellow metal from experiencing a small weekly gain.
Among other precious metals, silver rose to $22.53 an ounce on Friday, going up 1.5 percent. Platinum rose to $974.41 and palladium to $1,925.16.
Bitcoin Reborn from its Ashes Again
Following China’s announcement that it would ban cryptocurrency transactions in the country, Bitcoin experienced an extreme drop. Subsequently, the crypto asset recovered from the losses.
The number one digital asset entered October at levels not seen since mid-September. At the time of writing, Bitcoin is hovering around $47,000. Its counterpart, Ethereum, also rose.
The rally in digital assets could be attributed to seasonal factors and Fed Chairman Jerome Powell’s statement last week supporting digital assets.
Forex at a Glance
This week, traders may keep an eye on the Australian dollar due to the release of the Reserve Bank of Australia’s (RBA) interest rate decision on Tuesday.
On Wednesday, the Canadian dollar may also be in the spotlight due to the release of its PMI figure and the Central Bank of Canada (BoC) Governor’s speech. Also on Thursday, the country will release its employment data.
On Friday, the US Non-farm payrolls data (NFP) for September, will be released. The figure is followed by investors all around the globe. Traders are likely to have the US Dollar on their watch list on Friday as it could be affected by the new NFP figure.
This week’s main economic events:
Monday
- Eurogroup Meeting
- Switzerland Consumer Price Index (CPI) m/m and Retail Sales y/y
- Spain Unemployment Change
- SIPMM Singapore Purchasing Managers Index (PMI)
- United States Factory Orders m/m
Tuesday
- Reserve Bank of Australia (RBA) Interest Rate Decision
- ISM United States Non-Manufacturing Purchasing Managers Index (PMI)
- Markit Japan Services Purchasing Managers Index (PMI)
- 10-Year Japanese Government Bond (JGB) Auction
Wednesday
- Reserve Bank of New Zealand Interest Rate Decision
- European Union Retail Sales m/m
- ADP United States Nonfarm Employment Change
- The EIA United States Crude Oil Stocks Change
Thursday
- Ivey Canada Purchasing Managers Index (PMI)
- Bank of Canada (BoC) Governor Macklem Speech
- The United Kingdom Labour Productivity q/q & y/y
- Germany Industrial Production m/m & y/y
Friday
- Canada Employment Change
- United States Nonfarm Payrolls
- Japan Household Spending y/y & m/m
- Germany Trade Balance
- Bank of England (BoE) Financial Policy Committee (FPC) Meeting Minutes