By Mike Dolan
Sept 3 (Reuters) – Some calm has returned to world markets over the past 24 hours as oil prices steadied and the angry bond market cooled down a bit.
There were no breakthroughs in the Gulf standoff between the U.S. and Iran, but President Donald Trump indicated an intention to limit the duration of the latest round of attacks, and top aides are seeking “quiet” in the conflict ahead of November’s midterm elections.
U.S. Treasury yields eased from multi-year highs overnight, while European equivalents remained on edge due to an exceptional surge in natural gas prices to three-year highs ahead of the winter season.
In equities, Asian shares were choppy on Thursday, while Wall Street futures were up before the bell after major indexes stateside closed higher on Wednesday.
Elsewhere, there was a flurry of activity in Japan’s yen on Wednesday, with suspicions of a fresh round of intervention to support the currency seeing it pop about 1% higher.
More likely, though, the move is due to traders’ rising bets for at least a quarter-point Bank of Japan rate hike this month as speculation swirled that the BOJ may hike by more than the typical amount, lifting the yen further early on Thursday.
Meantime, market attention is turning to the week’s U.S. labor market updates, with the rise in ADP’s private sector payrolls for August coming in slightly below forecast ahead of the nationwide jobs report tomorrow.
In earnings news, Broadcom’s update on Wednesday beat expectations but its fourth-quarter outlook underwhelmed, with its stock falling out of hours. Still, the chipmaker forecast strong AI chip sales for the next two years.
Chart of the day
Broadcom on Wednesday forecast strong AI chip sales for the next two years, offering fresh evidence that Big Tech’s appetite for AI infrastructure remains undiminished as investors scrutinize returns on massive spending. But shares of the Palo Alto-based chip giant were down over 1% in extended trading as its outlook for the rest of this year disappointed slightly.
Its shares have gained about 6% this year, significantly underperforming rivals and the broader SOX semiconductor index as AI spending concerns and increased competition persist – not least from Marvell Technology after its recent custom chip deal with Google.
Today’s events to watch
• U.S. weekly jobless claims (8:30 a.m. EDT), July trade balance (8:30 a.m. EDT), ISM August non-manufacturing PMI (10 a.m. EDT)
• Fed’s Christopher Waller participates in a Reuters NEXT Newsmaker interview (8:30 a.m. EDT)
• Cleveland Fed’s Beth Hammack and Chicago Fed’s Austan Goolsbee speak
Before you go, check out my latest column on whether U.S. hyperscalers are crowding European borrowers out of their own bond market.
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(By Mike Dolan)