Posted at 17 October 2022 / Categories Market Roundups
Market Roundup
•Dow up 1.86%, S&P 500 up 2.65%, Nasdaq up 3.43%
• US Oct NY Empire State Manufacturing Index -9.10, -4.00 forecast, -1.50 previous
• Canada New Motor Vehicle Sales (MoM) 136.0%, 135.2% previous
•French 12-Month BTF Auction 2.115%,1.950% previous
•French 3-Month BTF Auction 0.895%, 0.781% previous
•French 6-Month BTF Auction 1.313%,1.191% previous
• US 6-Month Bill Auction 4.245%, 4.030% previous
•US 3-Month Bill Auction 3.820% ,3.510% previous
Looking Ahead - Economic Data (GMT)
• 02:00 China GDP (YoY) (Q3) 3.4% forecast, 0.4% previous
Looking Ahead - Events, Other Releases (GMT)
• 00:05 Australia RBA Assist Gov Bullock Speaks
• 00:30 Australia RBA Meeting Minutes
Currency Summaries
EUR/USD: The euro strengthened against dollar on Monday as euro was helped by relief that's Britain new finance minister had quickly shredded virtually all of the unfunded tax cuts that triggered UK market turmoil this month. Britain's new finance minister Jeremy Hunt announced he was reversing "almost all" the tax measures laid out by Prime Minister Liz Truss and his predecessor Kwasi Kwarteng just three weeks ago.Bank of England Governor Andrew Bailey gave Hunt a vote of confidence on Saturday, saying they had an immediate meeting of minds on the need to fix the public finances, where there are estimates of a 70 billion pound ($78.72 billion) black hole. The euro gained 1.19% against the greenback to $0.9838, the highest since October 6. Immediate resistance can be seen at 0.9852(38.2%fib), an upside break can trigger rise towards 0.9922(Oct 6th high).On the downside, immediate support is seen at 0.9772(5DMA), a break below could take the pair towards 0.9724 (23.6%fib).
GBP/USD: The pound rallied on Monday after Britain's new finance minister ditched most of the government's multi-billion pound mini-budget. Sterling rallied by as much as 1.4% after Jeremy Hunt, who Prime Minister Liz Truss appointed on Friday, reversed large swathes of the 45-billion pound "mini-budget" that sparked unprecedented market turmoil in which the pound hit record lows and the Bank of England was forced to intervene.Hunt, who has served as health and culture minister under previous governments, replaced Kwasi Kwarteng, whose package of unfunded tax cuts on Sept. 23 unleashed a bond market sell-off. The pound was last up 1.2% against the dollar at $1.13052 . It's regained almost 10% in value since hitting a record low of $1.0327 after the unveiling of the mini-budget. Immediate resistance can be seen at 1.1384 (38.2%fib), an upside break can trigger rise towards 1.1576 (50%fib).On the downside, immediate support is seen at 1.1262 (5DMA), a break below could take the pair towards 1.1115(23.6%fib).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Monday as Wall Street rallied and a survey showed that domestic expectations for inflation remain elevated, supporting bets for further interest rate hikes by the Bank of Canada. Business sentiment has softened in Canada and most firms now think a recession is likely, a Bank of Canada survey showed. The price of oil, one of Canada’s major exports, settled 0.2% lower at $85.46 a barrel amid fears that high inflation and energy costs could drag the global economy into recession. The loonie was trading 1.2% higher at 1.3711 to the greenback . It has regained some ground after hitting last Thursday its weakest intraday level in more than two years at 1.3977.Immediate resistance can be seen at 1.3789 (5DMA) upside break can trigger rise towards 1.3878 (23.6%fib ).On the downside, immediate support is seen at 1.2700 (38.2%fib), a break below could take the pair towards 1.3672(21DMA).
USD/JPY: The dollar touched fresh 32-year high on the yen on Monday as investors braced for any sign of central bank intervention. Bank of Japan last month intervened to buy the yen for the first time since 1998, after the BOJ stuck to its policy of maintaining ultra-low interest rates, which has battered the currency this year.Japanese authorities kept up their warnings to the market on Monday of a firm response to overly rapid yen declines, after last week's fall and meetings of global financial leaders that acknowledged currency volatility. The yen hit a new 32-year low of 148.96 against the dollar on Monday, raising the chances that the Bank of Japan will again step in to shore up the currency. Strong resistance can be seen at 148.99(23.6%fib), an upside break can trigger rise towards 149.45 (Higher BB).On the downside, immediate support is seen at 148.34(Daily low), a break below could take the pair towards 147.44(38.2%fib).
Equities Recap
European stocks closed notably higher on Monday, reacting to new British finance minister Jereme Hunt's decision to scrap most of the policies announced in Prime Minister Liz Truss's budget on September 23.
UK's benchmark FTSE 100 closed up by 0.90 percent, Germany's Dax ended up by 0.70 percent, France’s CAC finished the day up by 1.83 percent.
U.S. stocks kicked off the trading week on Monday with a rally after Britain reversed course on an economic plan, while Bank of America was the latest financial company to post solid quarterly results, which lifted optimism about the corporate earnings season.
Dow Jones closed up by 1.86% percent, S&P 500 closed up by 2.65% percent, Nasdaq settled up by 3.43% percent.
Treasuries Recap
U.S. Treasury prices rose on Monday, pushing benchmark 10-year yields lower for the first time in three days and tracking moves in the UK bond market, after new finance minister Jeremy Hunt reversed most of Prime Minister Liz Truss's economic growth plan.
The yield on 10-year Treasury notes was down 4.1 basis points at 3.965%.The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was down 7.6 basis points at 4.431%.
The 10-year TIPS breakeven rate US10YTIP=RR was also up at 2.4615%.
Commodities Recap
Gold prices rose more than 1% on Monday after declines in the previous two sessions, as the U.S. dollar and Treasury yields faltered, although risks from looming Federal Reserve interest rate hikes persisted.
Spot gold was up 0.9% at $1,656.25 per ounce by 1:41 p.m. ET (1741 GMT), having risen more than 1% earlier in the session and moving away from the more than two-week low touched in the last session.U.S. gold futures settled 0.9% higher at $1,664.
Oil prices held steady on Monday in choppy trading as fears that high inflation and energy costs could drag the global economy into recession offset China's continuation of loose monetary policy.
Brent crude futures were down 1 cents, or 0.01%, to $91.62 a barrel, recovering from a 6.4% fall last week. U.S. West Texas Intermediate crude was down 15 cents, or 0.2%, at $85.46 after a 7.6% decline last week.