This Week: Oil prices surge amid middle east tensions

• Brent crude may potentially hit $80/bbl
   
• Chinese stocks surge on stimulus optimism
   
• US jobs report impacts global financial markets
   
• CPI data could inject volatility this week

Oil prices are gripped by the ongoing Middle East conflict.

Chinese stocks have soared on optimism about a stimulus-fuelled economic recovery, while shifting expectations of Fed rate cuts continue to dominate global financial markets, especially in light of this past Friday’s red-hot US jobs report.
 

We keep the spotlight on these major ongoing themes, which should offer sizeable trading opportunities this week.

Such opportunities are not limited to oil benchmarks (Brent, US crude), and Chinese stock indexes (CHINAH, CN50, HK50).

In fact, hardly any asset class can ignore the realities of heightened geopolitical tensions, global economic conditions, nor the Fed’s actions.

So, stay alert.

Events Watchlist:
 

• Monday, October 7th: One-year mark of Israel’s war in Gaza

Brent are US Crude are both coming off the back of their largest weekly gain so far this year.

We might even see $80/bbl Brent if markets sense the rising risk that oil supplies from the region will be materially impacted.

Until such fears subside meaningfully, oil should retain its upward bias for the short-term.

• Tuesday, October 8th: Chinese markets reopen; Golden Week travel and spending data

During the Golden Week holidays, the CHINAH, CN50, and HK50 have surged by double-digits (10-12%), bringing these stock indexes well into technically “overbought” territory.

Bulls would hope that the return of onshore traders/investors can keep pushing these indexes even higher.

Still, questions are already surfacing about how much further this rally can go, fuelled by optimism from China’s recent economic stimulus announcements.

If the Golden Week travel and spending data disappoints, that might trigger a sharp pullback for these indices.

• Thursday, October 10th: US consumer price index (CPI) and weekly jobless claims

The US500 index is closing in on its all-time high after the better-than-expected US nonfarm payrolls report out Friday, October 4th.

Although the Fed has already guided market’s attentions towards US jobs data rather than inflation, the incoming CPI may still inject volatility across markets.

A lower-than-2.3% headline year-on-year CPI number that boosts odds of a “soft landing” for the US economy may push the US500 to a fresh record high.

Also this week, US stock indices will remain sensitive to the scheduled speeches by Fed officials, the mid-week release of the latest FOMC meeting minutes, as well as the unofficial start to US earnings season on Friday.

Here’s a comprehensive list of other key economic data and events due this week:

Monday, October 7

• Brent: Iran-Israel conflict escalation? One-year mark of Israel’s war in Gaza
   
• AU200 index: Australia September inflation expectations
   
• GER40 index: Germany August factory orders; Eurozone August retail sales
   
• USD index: Speeches by Minneapolis Fed President Neel Kashkari, Atlanta Fed President Raphael Bostic, St. Louis Fed President Alberto Musalem
   

Tuesday, October 8

• CHINAH index: Chinese markets reopen after Golden Week holidays
   
• AUD: RBA minutes; Australia consumer and business confidence
   
• EUR: Germany August industrial production
   
• TWN index: Taiwan September CPI, PPI, trade balance
   
• US400 index: Speeches by Atlanta Fed President Raphael Bostic, Boston Fed President Susan Collins, Fed Governor Adriana Kugler
   

Wednesday, October 9

• NZD: RBNZ rate decision
   
• EU50 index: Germany August trade balance
   
• US30 index: FOMC minutes; speeches by Dallas Fed President Lorie Logan, Atlanta Fed President Raphael Bostic, Chicago Fed President Austan Goolsbee, San Francisco Fed President Mary Daly
   

Thursday, October 10

• JPY: Japan September PPI
   
• AUD: Australia October consumer inflation expectations
   
• SG20 index: Singapore 3Q GDP
   
• NOK: Norway September CPI
   
• US500 index: US September CPI; weekly initial jobless claims; speech by New York Fed President John Williams
   
• Tesla Robotaxi event
   

Friday, October 11

• NZD: New Zealand September manufacturing PMI
   
• EUR: Germany September CPI (final)
   
• GBP: UK August GDP, industrial production, trade balance
   
• CAD: Canada September unemployment rate
   
• RUS2000 index: US October consumer sentiment; September PPI
   
• US30 index: Earnings season kicks off with JPMorgan, Wells Fargo
   
• USD index: Speeches by Dallas Fed President Lorie Logan and Chicago Fed President Austan Goolsbee