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U.S. Private Payrolls Leave Inverstors Hopeful for a Blockbuster Jobs Day, Gas Prices Reach New Highs & Bitcoin Climbs to 5-month High

U.S. Private payrolls increase prior to NFP report

Days before this month’s non-farm payrolls announcement, it was reported that private payrolls in the United States unexpectedly rose.

Figures from the ADP national employment report showed that Private payrolls rose by 568,000 jobs last month, up from 374,000 in August.

Markets had forecasted that payrolls would increase by 428,000 jobs in September, however with numbers surpassing expectations, many are now hopeful for a blockbuster jobs day on Friday.

The Federal Reserve has hinted that they will begin tapering QE measures, providing employment growth continues, with today’s figures boosting the chances of this starting.

💡 What is tapering?
Tapering refers to policies that modify traditional central bank activities. Tapering efforts are primarily aimed at interest rates and at controlling investor perceptions of the future direction of interest rates. Tapering efforts may include changing the discount rate or reserve requirements.

Despite starting the day lower, the S&P 500 recovered to close 0.41% higher, with GBPUSD having its worst day in the last 5 sessions.

FTSE 100 lower as gas prices reach new highs

In the United Kingdom, the FTSE 100 closed 1.15% lower on Wednesday, as Gas prices continued to surge, hitting new highs in the process.

The price of UK Gas, which was at 60 pence to start the year, was up by close to 40% in the last 24-hours, trading above £3 per therm.

So far, the rise in prices, in particular for energy companies buying wholesale, has seen several of these operators go out of business, as the struggle to adjust to the inflationary costs.

Globally, prices have risen due to a surge in demand, in particular from Asia, which is having its own crisis in particular with coal.

💡 Coal crisis in Asia
Supply of coal within China slowed in recent weeks, as the country heads into winter, with the country’s electricity council stating that it will pay, “any price to ensure heating and power generation in winter”.

There have been numerous bottlenecks in the supply of coal and other energies in recent months, leading to prices of these commodities trading at multi-year highs. In Europe, the price of coal has risen to a 13-year high, with Australian coal surging by as much as 250% within the last year.

Russian leader, Vladimir Putin, today opened the possibility of producing more Gas to help calm markets.

Speaking to ministers, Putin stated that, “We are ready to work on this, and we would like such work to be based on an absolutely commercial basis”.

Bitcoin climbs to 5-month high

Prices of the world’s largest cryptocurrency rose for a fifth consecutive session, as investors continued to push prices higher.

BTCUSD hit an intraday high of $55,399 in today’s session, which is its highest level since May 12th.

Bitcoin is now just over $10,000 away from its record high, which it hit in April, before selling off due to Tesla and Elon Musk moving away from the coin.

💡 Yesterday Bitcoin passed 50k, what caused the price movement?
Bitcoin prices rose above $50,000 in today’s trading session, as the SEC delayed approval of a BTC ETF product.

Many, including Bloomberg Analyst Eric Balchunas, believe that the chances of approval are close to 75%, despite the SEC opting to conduct further diligence before giving the green light.

Since then, markets had mainly consolidated, and many believed that further weakness would come, especially as China moved to ban all crypto trading.

However, a week since this decision was made, prices have only surged, with some believing that we may soon see new record highs.

“Markets can remain irrational longer than you can remain solvent.”

– John Maynard Keynes

Eliman Dambell

Senior Market Analyst