Bond trajectory lifts the dollar, Apple’s production plans, gas sabotage – what’s moving the markets

Bond trajectory lifts the dollar, Apple’s production plans, gas sabotage – what’s moving the markets

By Jeffrey Smith – The dollar extended its advance, pushing the euro to a 20-year low and the offshore yuan to an all-time low. Fed Chairman Jerome Powell gets another chance to reassure or scare markets further after he missed his chance on Tuesday. Sterling fell, before it reversed, as authorities indulged in intervention due to a sharp rebuke of government plans to cut taxes. Apple’s stock fell in the primary market after a report that the planned increase in iPhone production this year was canceled due to weak demand. Biogen contains a new Alzheimer’s drug that appears to work better than the last drug. And the Kremlin is shocked – shocked! – by suggestions that it will sabotage its own gas pipelines, on the same day that it prepares to stop shipping any gas to Europe at all. US government oil inventories are due, after a sharp rise in inventories on Tuesday by the private sector. Here’s what you need to know in the financial markets on Wednesday, September 28.

1. Rising US yields push the dollar to new record levels. Ain Powell Khattab

The rally rose to a new high as US interest rate hikes continued to mount pressure on the global economy.

The yield on Treasuries exceeded 4% for the first time since 2010, buoyed by a short end to the bond market where bonds now achieve 4.25%, reflecting expectations that the Federal Reserve may not be able to cut interest rates significantly. Until 2024.

The Fed chief is scheduled to speak again later, starting at 10:15 ET (14:15 GMT), likely casting a shadow over his colleagues Rafael Bostic and James Bullard, who are due to speak earlier.

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Notable losses included in forex pairs, which fell to a new 20-year low of 0.9538, which fell to a new all-time low, and which faded again after the International Monetary Fund criticized the new unfunded British government. tax giveaway. It later recovered as the Bank of England said it would intervene to ensure orderly conditions in the bond market.

2. Apple and suppliers stumble over news of the cancellation of production increases

Apple (NASDAQ:) stock fell 3.7% after Bloomberg reported that it had canceled plans to increase iPhone production this year, after an expected rise in demand failed. Reports earlier this year indicated that the company was expecting to produce an additional 6 million units of its flagship iPhone 14.

The world’s leading perennial consumer product is hit by the constraints of tight budgets, casting doubt on Apple’s ability to move forward with a significant shift in average sales prices.

Stocks of iPhone component suppliers, such as Qualcomm (NASDAQ:) and STMicroelectronics (NYSE:)) also declined in the primary market.

3. Stock set to open mixed. New Alzheimer’s drug Biogen eases Apple disappointment

Stocks are set to open mixed again after a similar day on Tuesday, with the continued rout in bonds and news from Apple weighing on sentiment.

By 06:20 ET, it was up 44 points, or 0.1%, while flat and down 0.4%, as Apple news in particular hurt the chip industry and the broader technology sector.

One stock that sharply bucked this trend is Biogen Inc (NASDAQ 🙂 after results from the first clinical trials of its latest Alzheimer’s drug showed it significantly slows the disease’s progression. The news presents Biogen with a chance to recoup after the controversial approval of the latest Alzheimer’s drug Aduhhelm.

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4. The Kremlin is resisting reports of pipeline sabotage, but Moscow is preparing for more cuts

The Kremlin dismissed “stupid” suggestions that Russia was behind the apparent sabotage of Nord Stream gas pipelines earlier this week, effectively ending any chance of resuming direct gas shipments to Germany, as well as creating a fatal risk to shipping and a massive release of the world’s most powerful greenhouse gases. Earth’s atmosphere.

Swedish and Danish seismologists identified two separate explosions equivalent to 100 kilograms of dynamite each, leading their governments to conclude that the tubes were deliberately attacked. Both blamed Russia for the accident.

Natural gas prices in Europe soared this week not only due to the attack, but also to Gazprom’s announcement on Tuesday that it may move its own gas, save for ending gas shipments to the European Union as the key winter heating season begins.

5. Oil hits new low in 2022 as inventory builds; EIA data due

Crude oil prices fell to a new low in 2022 before rebounding to rise slightly by 06:30 ET, with the market pricing in demand destruction from the global economic slowdown, as well as rising political risk premiums in response to signs of growing desperation in the Russian government’s use of its resources. of energy as an economic weapon.

By 6:30, futures were up 0.8% at $79.09 a barrel, while they were up 0.7% at $85.48 a barrel.

The US government is due to release weekly inventory data at 10:30 ET as usual. American Petroleum Institute figures showed a cumulative shock of 4 million barrels to inventories, indicating that US demand is slowing more sharply than expected.

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