From Marc Chandler at Bannockburn Global Forex:
What a difference the weekend made. There is a resilience today that was not seen at the end of last week. Questions over the Ai-meme, which drove the semiconductor index down 7.2%, have eased today, despite S&P cutting Meta’s rating outlook at the end of last week. Last week, France escaped a Moody’s downgrade, but at the end of the week saw its outlook cut by Fitch. At the end of last week, December WTI reached a contract high near $105. The reports suggesting that Washington will give the negotiations more time has pressured December WTI below $100, which appears to be one of the factors that may be behind the lower bond yields today.
The US dollar is mixed. Most European currencies are higher but the Norwegian krone, which might have been knocked back (~0.70%) by the pullback in oil prices. The dollar-bloc currencies and the Japanese yen are also weaker. Tomorrow is the US midterm election. There does not seem to be a strong statistical pattern for the dollar around the election. However, one of the most regular patterns is that the S&P 500 tends to do well in Q4 of the midterm election year, and the third year of a presidential term (2027) is the strongest year of the presidential cycle.
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