Posted at 13 October 2022 / Categories Market Roundups
Market Roundup
•BoE signals to private group it may extend bond buys, FT says
•U.S. producer prices rise in September
•U.S. indexes: Dow down 0.1%, S&P 500 down 0.3%, Nasdaq down 0.1%
• US Sep Core PPI (MoM) 0.3%,0.3% forecast, 0.4% previous
•US Sep PPI ex. Food/Energy/Transport (MoM) 0.4%,0.2% previous
•US PPI ex. Food/Energy/Transport (YoY) 5.6%, 5.6% previous
•US Sep PPI (YoY) 8.5%, 8.4% forecast,8.7% previous
•US Sep PPI (MoM) 0.4%, 0.2%forecast,-0.1% previous
Looking Ahead - Economic Data (GMT)
• 23:50 Japan Sep Bank Lending (YoY) 2.0% forecast,-1.9% previous
•00:00 Australia MI Inflation Expectations 5.4% previous
Looking Ahead - Events, Other Releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro edged lower against dollar on Wednesday as investors digested minutes from the latest Federal Reserve meeting and waited for a key U.S. inflation reading. Fed policymakers agreed they needed to move to a more restrictive policy stance for some time to meet the U.S. central bank's goal of lowering inflation - a message in line with the hawkish tone officials have voiced since then. Wednesday's U.S. inflation reading, the Producers Price Index (PPI), left expectations for the Fed's November rate hike intact. Still, investors were laser-focused on Thursday's Consumer Price Index (CPI). The euro fell 0.04% against the dollar to $0.9699. Immediate resistance can be seen at 0.9766(5DMA), an upside break can trigger rise towards 0.9843 (38.2%ib).On the downside, immediate support is seen at 0.9668(23.6%fib), a break below could take the pair towards 0.9571 (Lower BB).
GBP/USD: The British pound edged higher on Wednesday after the Bank of England affirmed its commitment to end its emergency bond buying programme as scheduled on Friday, even as reports signalled they could extend purchases should market conditions warrant. The Financial Times reported that the Bank of England (BoE) has privately indicated to bankers that it could extend bond buying beyond Friday’s deadline if market conditions demanded it, citing three sources briefed on the discussions. Meanwhile, official data showed Britain’s economy unexpectedly shrank by 0.3% in August, hit by weakness in manufacturing and maintenance work in the North Sea oil and gas fields. British pound was up against the dollar at $1.1038, snapping five days of losses. Immediate resistance can be seen at 1.1187 (38.2%fib), an upside break can trigger rise towards 1.1281 (Sep 23rd high).On the downside, immediate support is seen at 1.1065 (5DMA), a break below could take the pair towards 1.0934 (23.6%fib).
USD/CAD: The Canadian dollar edged lower against its U.S. counterpart on Wednesday, moving closer to its weakest level in over two years, as oil prices fell and investors weighed data showing U.S. producer prices climbed more than expected in September. U.S. producer prices rose at an annual rate of 8.5% in September, supporting bets for more jumbo-sized interest rate hikes by the Federal Reserve. Investors have worried that the pace of central bank tightening could tip some major economies into a recession. Canada is a major producer of oil, including commodities, so its economy is particularly sensitive to the global growth outlook.The loonie was down 0.1% at 1.3812 to the greenback, or 72.40 U.S. cents, after trading in a range of 1.3761 to 1.3830. On Tuesday, the currency touched its weakest intraday level since May 2020 at 1.3855. Immediate resistance can be seen at 1.3840 (23.6%fib), an upside break can trigger rise towards 1.3900(Higher BB).On the downside, immediate support is seen at 1.3785 (5 DMA), a break below could take the pair towards 1.3730 (38.2%fib).
USD/JPY: The dollar steadied against the yen on Wednesday after minutes from the last Federal Reserve meeting . Several participants noted the importance of calibrating the pace of further tightening to mitigate the risk on the U.S. economy, the minutes said. The Fed though remained committed to raising interest rates in order to bring down inflation. Data showing U.S. producer prices increased more than expected in September, further boosted the dollar against the yen. The producer price index for final demand rebounded 0.4%, above the forecast for a 0.2% rise. In the 12 months through September, the PPI increased 8.5% after advancing 8.7% in August.The greenback rose as high as 146.98 yen , its strongest since August 1998. It was last up 0.7% at 146.85, marking a fifth straight session of gains. Strong resistance can be seen at 146.99 (38.2%fib), an upside break can trigger rise towards 147.27 (Higher BB).On the downside, immediate support is seen at 146.15(5DMA), a break below could take the pair towards 145.71(Daily low).
Equities Recap
European stocks closed lower on Wednesday, extending recent losses, as global growth concerns, rising interest rates and geopolitical tensions continued to weigh.
The UK's benchmark FTSE 100 closed down by 0.86percent, Germany's Dax ended up by 0.39 percent, and France’s CAC finished the down by 0.25 percent.
U.S. stocks ended a choppy session slightly lower on Wednesday after minutes from the last Federal Reserve meeting showed policymakers agreed they needed to maintain a more restrictive policy stance.
Dow Jones closed lower by 0.10 percent, S&P 500 was down 0.33 percent, Nasdaq was down by 0.09 percent.
Treasuries Recap
The sell-off in Treasuries eased on Wednesday, but data showing U.S. producer prices rose more than expected in September suggest inflation will remain high and keep the Federal Reserve on track to aggressively hike interest rates.
The two-year Treasury yield, which typically moves in step with interest rate expectations, fell 2.1 basis points to 4.295%, while the 10-year's yield US slid 2.4 basis points to 3.915%.
Commodities Recap
Gold prices firmed on Wednesday, drawing support from a drop in the dollar and U.S. Treasury yields in the wake of minutes from the Federal Reserve’s last policy meeting.
Spot gold rose 0.5% to $1,673.59 per ounce by 2:40 p.m. ET (1840 GMT). U.S. gold futures settled down 0.5% at $1,677.50.
Oil futures fell for a third straight day fueled by worries about weaker demand and expectations for continued interest rate hikes by central banks around the world.
U.S. crude futures settled down 2.3% at $87.27 per barrel and Brent settled at $92.27, down 2% on the day.