Before we get into October, let's take a look back at how the seasonals did in September. At the end of August, I highlighted some trends in the month, including weakness in the S&P 500 and MSCI world index. Ultimately, both stuck to the seasonal script.
Another one I highlighted was yen weakness (USD/JPY rose 205 pips in the month). One I find particularly interesting is NZD/USD strength. That historical pattern goes against the usual risk aversion in September and it did once again this year as NZD/USD made slight gains this month. USD/CAD also bucks the trend as the loonie often gains and that was true for most of this month before giving it back in the final day of Sept.
Oil tends to decline in Sept (it certainly didn't this year) while natural gas tends to climb (it did this year again). Those trends in the energy market continue in October, which is a particularly cruel month for WTI.
Here are the seasonal highlights for October 2023 (20 year avgs):
- 10-year Treasury yields rise more in Oct than another other month
- Third-best month of the year for AUD
- Fourth best month for the Dollar Index
- Second-best month for the MSCI world index
- Weakest month for EUR/AUD
- Third weakest month for the euro
- Third-best month for the Nasdaq (and not far off from the best), though volatility is high with double digit gains/losses not uncommon
- Fourth best month for the S&P 500
- Third best month for the DAX
- Strongest month of the year for natural gas
- Weakest month of the year for oil
