As we approach October 2023, the markets around the world are set to undergo some major volatility. With geopolitical tensions rising and markets being increasingly affected by global financial events, investors have begun to pay close attention to the critical charts that play a key role in shaping the direction of the markets.
To help you prepare for whatever the month might bring, here’s a look at the 10 essential charts you need to know in October 2023:
1. US Treasury Yield Curve: With renewed interest in the US government debt market, the US Treasury Yield curve has become an important measure for gauging investment sentiment. The shape, steepness, and inversion of this chart can reveal shifts in the amount of demand for US Treasury bonds and therefore influence the broader market.
2. USD/Chinese Yuan Exchange Rate: Rising trade tensions between the US and China will continue to set the tone for the global markets in October. Any sign of a possible devaluation of the Chinese yuan against the US dollar could have major implications for both the Chinese and US economies.
3. Euro/US Dollar Exchange Rate: The euro has been trading in a volatile range for most of the year, and investors will be paying close attention to the euro/US dollar exchange rate in October. A break below a certain level of support/resistance could trigger a wave of sell-offs across the different markets.
4. Oil Prices: The fragile output cut agreement between the OPEC+ countries has kept oil prices reasonably stable, but any significant shifts in production could lead to wild price swings. In addition, developments regarding the US-China trade war could also affect the price of oil in October.
5. Gold Prices: Gold is seen as a safe-haven asset during times of financial stress, and its price can be a leading indicator of investor sentiment. As October progresses, investors should keep a close eye on this chart to gauge the amount of risk aversion in the markets.
6. Bitcoin Prices: The cryptocurrency market is notoriously volatile and investors will need to pay attention to Bitcoin prices in October. Any sharp swings could signal a shift in investor sentiment towards digital assets.
7. S&P 500 Index: The benchmark index of the US stock market is likely to track the overall economic conditions and any major developments on the trade war front. As such, investors should pay close attention to S&P 500 Index movements in October.
8. China SSE Composite Index: The largest index of the Shanghai stock exchange reveals the rise and fall of Chinese stocks and by extension the performance of the Chinese economy. Watch out for any signs of turbulence in the Chinese markets that could have broader implications for the global markets.
9. Indian Nifty 50 Index: The Nifty 50 index has been one of the best performing indexes of the year and could be affected by both domestic and global factors. This makes it necessary to monitor the movements of the Nifty 50 index in October.
10. Hang Seng Index: The Hong Kong stock exchange is particularly sensitive to rising US-China tensions and any escalations in October could spell troubles for the Hang Seng Index. Therefore, investors need to keep a close eye on this index for signs of instability.
In conclusion, the markets in October 2023 are likely to be set for some major volatility due to the continued geopolitical and financial unrest. As such, investors need to stay abreast of the 10 crucial charts discussed above to ensure that they remain up-to-date with the latest developments and can make informed investment decisions.