US job reports meet geopolitical tensions, markets brace for volatility

Asian markets experienced a notable rally, in response to China’s newly announced stimulus measures. Meanwhile, mainland Chinese markets remain closed for Golden Week celebrations, scheduled to continue until October 7. Despite the rally in Hong Kong, both Vietnam and Japan's indices trended lower, largely due to growing concerns over the rising tensions in the Middle East.

Tensions in the Middle East escalated after Iran launched a major missile attack on Israel, marking the largest military action between the two nations. Israel has vowed a “painful” retaliation, raising fears of broader regional conflict that could ripple through global markets.

In commodities

Oil prices rose amid the mounting geopolitical risk. Brent crude advanced by 0.77%, reaching $74.94 per barrel, while West Texas Intermediate (WTI) edged up by 0.75% to $71.27 per barrel. An OPEC+ panel is set to meet today to evaluate market conditions. In contrast, natural gas prices have remained flat, consolidating near key technical levels.

In more specific oil market updates, WTI, the benchmark for US crude, is currently trading around $70.65. The price rise follows Iran's missile assault on Israel, intensifying concerns over potential disruptions to oil supplies in the region. Iran reportedly fired over 200 ballistic missiles, prompting Israeli Prime Minister Benjamin Netanyahu to pledge a strong retaliation. Iran, in turn, warned that any Israeli response could lead to “vast destruction,” further raising the risk of a larger conflict. Israel has also signaled the possibility of targeting Iranian oil infrastructure, which would likely exacerbate regional instability and further strain crude supplies.

Silver is consolidating below the mid-$31.00 range, showing limited intraday momentum. However, the technical outlook remains slightly bullish, supporting the possibility of further gains. A drop below the $30.90-$30.85 zone, however, could trigger more significant losses.

Gold, meanwhile, has attracted some safe-haven buying as tensions rise in the Middle East. However, the stronger US dollar and reduced expectations for aggressive Federal Reserve rate cuts have capped gains. Traders are now focused on the upcoming US ADP employment report for new direction, with non-farm payrolls data due on Friday.

Today’s economic calendar

There is little major data scheduled for release. Key figures include the Eurozone unemployment rate, expected to hold steady at 6.4%, and the US ADP report, anticipated to show 120,000 new jobs, an increase from the previous 99,000. Investors will also hear from several central bank officials, although markets have largely priced in a 25 basis point rate cut by the ECB in October.