OPEC+ Decided Cutting Production by 2M BPD

According to Treasury Department data released earlier today, the U.S. national debt surpassed $31 trillion for the first time in history. The figure precisely was $31.123 trillion as of Monday, October 3. The new milestone was reached even as the U.S. federal government's accelerating spending has somewhat slowed as the Covid-19 pandemic stepped back. In the months following the outbreak, the U.S. national debt spiked by $1 trillion in just a month’s time — not just once, but twice in 2020, and thereafter, under the new U.S. Administration, by another $1.9 trillion. As a result, the federal government spent $3.1 trillion more than it received in 2020, and it spent $2.8 trillion more than it received the following year.

In 2022, the U.S. budget deficit is expected to be about $1 trillion. Some experts believe $1 trillion per year in new debt is the floor given growth in entitlement spending as well as new spending priorities set by Congress this year. Those priorities include the health and environmental policy bill known as the Inflation Reduction Act and military assistance to Ukraine.

Meanwhile the U.S. stocks opened lower today, giving back some of this week's controversial gains as investors eyed the data showing job growth in September. At the time of writing, the Dow Jones Industrial Average (DJIA) fell 1%, while the S&P 500 (SPX) dropped 1.1% and the Nasdaq Composite (COMP) slid 1.4%. According to ADP's employment report, U.S. private sector employers added 208,000 jobs last month, up from a revised 185,000 in August. September's employment growth was slightly stronger than the 200,000 of job gains expected by economists polled by the Wall Street Journal.

A key panel earlier today recommended that the OPEC+ cut oil production by 2 million barrels a day. The recommendation by the Joint Ministerial Monitoring Committee comes ahead of a meeting of OPEC+ delegates in Vienna that's slated to begin shortly. Expectations for a cut of around 2 million barrels a day have helped lift crude futures this week. Thus, WTI crude for November delivery on the New York Mercantile Exchange rose 0.9% to $86.91 a barrel, while December Brent crude was up 1% at $92.32 a barrel on ICE Futures Europe.

European markets are also trading lower today. As of 4:50 p.m. CET, the Pan European Stoxx Europe 600 Index fell 1.28%, the British FTSE 100 eased by 0.87% while the French CAC 40 Index retreated 1.3%, and the German DAX fell 1.51%.

The S&P Global Eurozone services PMI was revised down to 48.8 in September versus a preliminary level of 48.9, while composite PMI fell to 48.1 in September from a preliminary reading of 48.2. The S&P Global Germany’s services PMI was revised lower to 45 in September against a preliminary reading of 45.4, while French services PMI was revised lower to 52.9 in September from a flash reading of 53. Industrial production in France rose 2.4% on a monthly basis in August.

Elsewhere, Asian markets traded higher today. Japan’s Nikkei 225 rose 0.48%, while Hong Kong’s Hang Seng Index jumped 5.8% and Australia’s S&P/ASX 200 surged 1.7%. Across key data, Japanese services PMI was revised higher to 52.2 in September from a preliminary level of 51.9, while composite PMI rose to 51.0 in September from the flash reading of 50.9. Retail sales in Australia climbed by 0.6% MoM to a new high of AUD 34.88 billion in August. Australian services PMI rose to 50.6 in September, versus a final level of 50.4 in August.