{x} | Trading.live

[Quick Facts]

1. U.S. House votes to remove Republican House Speaker McCarthy.

2. U.S. job openings rose unexpectedly to 9.61 million in August, while layoffs remained low.

3. The yen rebounds after falling below 150 amid talk of Japan's intervention.

4. U.S. Treasury yields continue to climb across the board.

5. Fed officials strengthen their stance to maintain high rates for long.

[News Details]

U.S. House votes to remove Republican House Speaker McCarthy

The U.S. House of Representatives voted on a motion to remove Republican House Speaker Kevin McCarthy from office on October 3 local time, which was passed by a vote of 216 to 210. It marked McCarthy became the first to be voted out of office as Speaker of the House of Representatives. Last weekend, the U.S. Congress passed a stopgap funding bill, temporarily avoiding a federal government "shutdown" but triggering a "fight" within the Republican Party. Prior to this, ultra-conservative Republicans had been pressuring McCarthy to drastically reduce federal spending and strengthen border control. However, the U.S. Congress approved the short-term stopgap funding bill at the last minute before a government shutdown. The move satisfied the White House, but the bill did not include a substantial reduction in federal spending or strengthen border control provisions, which dissatisfied Republicans. Subsequently, Matt Gaetz, one of the hard-line Republicans, filed a motion in the House in an attempt to remove Republican House Speaker McCarthy.

U.S. job openings rose unexpectedly to 9.61 million in August, while layoffs remained low

U.S. job openings rose unexpectedly in August, underscoring the persistence of labor demand. The number of job openings increased to 9.61 million in August, compared with a revised 8.92 million in July, according to the Job Openings and Labor Turnover Survey (JOLTS) released on Tuesday by the U.S. Bureau of Labor Statistics. Employment increased slightly and layoffs remained low. Economists polled by the media forecast a median of 8.82 million job openings. The tight labor market supports wage growth, which fuels consumption and demand-driven inflation, and wage growth remains a focus of the Federal Reserve.

The yen rebounds after falling below 150 amid talk of Japan's intervention

The yen has broken away from its lowest level against the dollar in a year. There is speculation that Japanese officials are taking action to slow the yen's decline. The USDJPY once touched 150.16, the yen's lowest level since October 2022, in the New York session on Tuesday. This followed a report showing that U.S. labor demand remained strong. Later, the yen soared nearly 2% in seconds, reaching a high of 147.43 per dollar. But as U.S. Treasury yields rose, the yen depreciated again, and the USDJPY last quoted at 148.90. "We won't know the answer to that until it's officially confirmed. But it does feel that way," said Bipan Rai, global head of FX Strategy at Canadian Imperial Bank of Commerce, when speaking on the possibility that Japanese authorities have intervened.

U.S. Treasury yields continue to climb across the board

U.S. Treasury yields continued to climb across the board, with long-term Treasury yields leading the way as the U.S. economy showed more resilience. The benchmark 10-year Treasury yield closed at 4.801%, and the U.S. 30-year Treasury yield rose by 15 basis points to 4.95% during the day, both again setting new multi-year highs. The U.S. 30-year Treasury Inflation-Protected Securities (TIPS) yield exceeded 2.5%, the highest level since 2008. Bridgewater founder Dalio said the equilibrium level of the U.S. 10-year Treasury yield seemed to be around 5%.

Fed officials strengthen their stance to maintain high rates for long

"I am not in a hurry to raise, I am not in a hurry to reduce either," said Atlanta Fed President Raphael Bostic. He expected that the next move would be a 25-basis-point cut at the end of next year. Cleveland Fed President Loretta Mester said she is likely to support a rate hike at the next meeting if the current economic situation persists. She doesn't see a rate cut anytime soon.

[Focus of the Day]

TBD OPEC+ Meeting of the Joint Ministerial Monitoring Committee

UTC+8 09:00 The Reserve Bank of New Zealand announces its interest rate decision

UTC+8 16:00 European Central Bank President Christine Lagarde speaks

UTC+8 16:30 U.K. Service Industry PMI Final (Sept)

UTC+8 17:00 Eurozone PPI MoM and Retail Sales MoM (Aug)

UTC+8 20:15 U.S. ADP Employment (Sept)

UTC+8 22:00 U.S. ISM Non-Manufacturing PMI (Sept) and Factory Orders MoM (Aug)

UTC+8 22:25 Fed Governor Bowman speaks

UTC+8 22:30 U.S. EIA Crude Stocks for the Week Ended Sept. 29

UTC+8 03:00 Next Day: Fed Goolsbee delivers a speech