Sentiment Improves as Rally Continues

At the same time, US yields remain elevated, implying bond traders are not as euphoric regarding a possible Fed pivot as equity traders.

In the FX land, the USD dropped again, although losses seem limited so far, The EURUSD pair remains below parity, and GBPUSD trades at around 1.13 today.

Earlier today, German factory orders again fell short of estimates in August, indicating that the industrial sector’s output is generating less strength.

Oil cancels bearish trend

The eighth round of sanctions on Russia was agreed upon by the European Union, and they include a price ceiling on the refined goods and crude oil produced there. Alexander Novak, the deputy prime minister of Russia, replied by stating that his nation would be prepared to reduce output to offset price limitations and that an oil price of 70 USD per barrel would be acceptable.

At the same time, OPEC+ and the Joint Ministerial Monitoring Committee, made up of important ministers from the participating countries, opted to reduce oil output by 2 million barrels per day. They also declared that their monthly meetings would end.

As a result, the WTI oil rose to three-week highs above 87 USD before correcting slightly today.

The focus is now on US nonfarm payrolls statistics expected on Friday for more hints about the strongest economy in the world. Strengthening employment trends offer the Fed greater leeway to continue raising rates quickly, which is likely to be bad for risk assets.