Market Commentary: Friday 3rd October

The global equity market continues to rally into its sixth day on AI-fuelled optimism, with the MSCI World Index gaining 0.1% and Asian tech stocks reaching record highs.

The JPY weakened 0.3% against the USD overnight as Bank of Japan Governor Kazuo Ueda avoided giving a clear signal on a rate hike at the next decision, keeping his options open. The OIS market is pricing in a 55% chance of a rate hike at the BoJ meeting on October 30. Meanwhile, Japan is bracing for the Liberal Democratic Party’s leadership vote tomorrow, which will likely determine the next Prime Minister. Of the two candidates, Takaichi is expected to support a slower pace of hikes and favour monetary easing, while Koizumi is more likely to back incremental changes and wage growth support.

On today’s economic calendar, China and South Korean markets are closed. All eyes are on U.S. Non-Farm Payroll and Unemployment data, due this afternoon at 1:30 pm, though delays are expected due to the U.S. government shutdown. Fed’s Goolsbee noted that labour market data from his staff suggests U.S. employment remains stable.

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