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Dollar gives some back

  
Analysis, US Market

Markets:

  • Gold up $29 to $1755
  • US 10-year yields  down 2.2 bps to 1.516%
  • S&P 500 down 52 points to 4307
  • WTI crude oil up 43-cents to $75.27
  • AUD leads, EUR lags
  • On the month, USD leads, GBP lags
All bets are off at quarter end and we saw that in every direction today, including some ugly late selling in equities after what had been a positive start.
The US dollar gave back a big chunk of its recent gains on a few fronts, particularly versus the yen and commodity currencies. Cable bounced a half cent after a couple of bruising days while the euro couldn’t even muster a dead cat bounce.
US political headlines were coming from all over the place but it would be hard to tie them directly to price action in markets. Along the same lines, the market didn’t react to the miss in initial jobless claims.
The headline about China buying energy at any cost helped to lift gas and oil prices. That also  gave the loonie a lift.
Quarter end flows were a big factor all around but it’s tough to say exactly how much was flows and how much was worry about: Inflation, bottlenecks, China, Washington and energy. There’s so much to unpack in markets at the moment and maybe it’s the combination that’s the real story.
Forex news for North American trading on September 30, 2021:

OPEC+ considering options for releasing more oil to the mkt at next wk’s meeting

  
Analysis, Crude

According to four OPEC+ sources

According to 4 OPEC+ sources:
  • OPEC+ is considering options for releasing more oil to the market at next week’s meeting
The price of crude oil has come off on the news and currently trades at $75.04. The high price reached $76.04.
The current deal is to increase production by 400K BPD one meeting next week. The sources did not give details on a volume door which month they would to increase production.  However, one source suggested an increase of 800,000 BPD was a possible scenario for one month with zero the next month.
The nearest month the increase could take place is in November as the last agreement set the October volumes.

Manchin gave Biden his terms to back President’s plan – Politico

  
  Analysis

Memo covers tax, energy and spending and tops at $1.5 trillion

Memo covers tax, energy and spending and tops at $1.5 trillion
It looks like we’re down to the negotiating. Both sides are going to have to give but Biden has been a politician for 49 years. You can argue he’s spent his whole life preparing for this moment.
“Senator Manchin does not guarantee that he will vote for the final reconciliation legislation if it exceeds the conditions outlined in this agreement,” the paper obtained by Politico reads in bold text.
Manchin proposes raising the corporate tax rate to 25%, the top tax rate on income to 39.6%, raising the capital gains tax rate to 28% and says that any revenue from the bill “exceeding” $1.5T will go to deficit reduction. Also asks Fed to stop quantitative easing program Additionally, Manchin is calling for means testing on as many new programs as possible, “targeted spending caps on existing programs” and “no additional handouts or transfer programs.” Manchin also asks his committee have sole jurisdiction over any clean energy standard
I mean, if his red line is stopping QE; that’s just stupid and this is going nowhere. But it makes me think that none of this is a real red line.
The document is also dated July 28, though they say he’s been redistributing it lately.
The other holdout is Sinema though and the press secretary at the White House yesterday said “it has the sense that Sen. Sinema does want to see a reconciliation bill”. Politico also had this on her:
Biden and the White House have been engaging in breakneck negotiations with Sen. Kyrsten Sinema (D-Ariz.), the other prominent holdout in the Senate. She’s generally aligned with Manchin on the spending number, but has expressed more concerns with Democrats’ tax plans than Manchin has.
memo
Some quick notes:
  • Capital gains is currently 23.8%, he would go to 28% “all in” (I’m not sure what the last part means).
  • Highest rate would go to 39.6% from 37%
  • Corporate rate to 25% from 21%

Major European indices are closing the day in the red. Down for the month.

  
  Analysis
#  #  #  #

German Dax down -0.4%.

The major European indices are closing the day (and the month) in the red.

A snapshot of the provisional closes shows:
  • German DAX, -0.4%
  • France’s CAC, -0.3%
  • UK’s FTSE 100, -0.4%
  • Spain’s ibex -0.6%
  • Italy’s FTSE MIB unchanged
For the month, the major indices are also closing lower:
  • German DAX, -3.3%
  • France’s CAC -2.1%
  • UK’s FTSE 100, -0.35%
  • Spain’s ibex, -0.23%
  • Italy’s FTSE MIB -1.0%
A look at other markets as the London/European traders look to exit for the day and say goodbye to the month of September shows:
  • Spot gold up $35.75 or 2.07% at $1760.70. The move to the upside has been supported by a lower dollar today
  • Spot silver is also up strongly by $0.58 or 2.76% at $22.10
  • WTI crude oil futures are up $0.36 or 0.45% $75.20
  • Bitcoin is up $79 and $43,254

Evergrande has made 10% repayment for its wealth management products due this month

  
  Analysis

A statement by Evergrande

The funds are said to have been transferred to investors’ accounts. For some context, this isn’t a ‘missed payment’ per se as previous documents a couple of weeks back detailed that Evergrande is to pay 10% of the sum for its wealth management products after maturity and then 10% every three months after.
So, essentially they have fulfilled the first part of the supposed payment plan. The full statement by the company can be found here.
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