NAGA’s Weekly Recap 31 October – 4 November

It seems, investors need some time off after a topsy-turvy year, but things may not be better at the local amusement park. Fed Chair Jay Powell took the market on another rollercoaster on Wednesday by raising the key interest rate. The markets reacted instantly.

Other than that, there were several other key economic events during the week that we would like to focus on:

✅ Fed hikes by 75bp, Powell gives both hawkish and dovish indications
✅ BNP Paribas ($BNPP) profit tops forecast despite higher costs
✅ Goldman Sachs predicts that European natural gas prices will drop by about 30%
✅ October Non-Farm Payrolls (NFP) showed an increase to 261,000

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⚡Learn more in our recap right now!

Fed hikes by 75bp, Powell gives both hawkish and dovish indications

As expected by the market, the Federal Reserve has increased its Federal Fund Rate by 75 basis points for a fourth consecutive month. However, the market is more interested in the comments made by the Chairman and general future guidance. Most analysts have advised that the press conference showed neither signs of an ultra-hawkish nor dovish Fed.

As a result, the price of the US Dollar Index has increased to 112.48 which is the highest since October 20th. Furthermore, Dow Jones declined by 1.65% in its largest decline since October 7th.

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BNP Paribas ($BNPP) profit tops forecast despite higher costs, debt markdown

BNP Paribas, the euro zone’s biggest lender, posted a higher than expected net profit in the third quarter.

Net income for the three months to end September rose by 10.3% from a year earlier to 2.76 billion euros ($2.73 billion), compared with an average of 2.36 billion euros expected. Revenue rose 8% to 12.3 billion euros.

The increase was driven by a better than expected performance in France, Turkey and Poland. Profits were also lifted by a 14.7% rise in global markets revenue, with market volatility boosting trading in commodity derivatives, rates, foreign exchange and emerging markets.

Investors reacted positively to the news, and the stock began to rise after the earnings release.

Trade $BNPP

Goldman Sachs predicts that European natural gas prices will drop by about 30%

GS predicts that European natural gas ($GAS) prices would drop by about 30% in the coming months as nations gain a temporary upper hand on supply issues.

The cooling in gas prices has derived from several factors: Europe’s gas storage is basically full for this winter season; temperatures this fall have been milder than expected thus delaying the start of a period of heavy usage; and there is an oversupply of liquefied natural gas (LNG).

After all, a decrease in the cost of gas is a good signal for the markets, and one of the factors in the decline of Brent, WTI oil, as well as other energy assets.

Do you expect the price of gas and other energy resources on the world market to decrease?

Trade $GAS

October Non-Farm Payrolls (NFP) showed an increase to 261,000

The US NFP figure had declined for 3 consecutive months, leaving economists fearful for the US employment sector. However, today’s reading shows a much higher NFP figure compared to that expected by the market. Most economists believed the NFP figure would decline again to below 220K, but it was actually confirmed ast 261K.

The NFP figure shows that the employment sector may not be under as much pressure as originally thought. The Average Hourly Earnings also came in higher than expected. Neither is good for inflation, but the US unemployment rate did climb to 3.7%.

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This concludes our weekly recap.

Have a great weekend and see you next week!