Posted at 18 October 2022 / Categories Market Roundups
Market Roundup
•Canada Aug Foreign Securities Purchases by Canadians -1.41B,4.30B previous
•Canada Aug Foreign Securities Purchases 22.01B, 17.32B forecast, 14.83B previous
•US Redbook (YoY) 8.0%, 8.3% previous
•US Sep Manufacturing Production (MoM) 0.4%, 0.2% forecast, 0.1% previous
•US Sep Industrial Production (YoY) 5.33%,3.68% previous
•US Sep Industrial Production (MoM) 0.4%, 0.1% forecast, -0.2% previous
•US Oct NAHB Housing Market Index 0.4%, 43 forecast, 46 previous
Looking Ahead - Economic Data (GMT)
•01:30 China Sep House Prices (YoY) -1.3% previous
Looking Ahead - Events, Other Releases (GMT)
•01:30 Japan BoJ Board Member Adachi Speaks
Currency Summaries
Fxbeat
EUR/USD: The euro strengthened against dollar on Tuesday ,shaking off some of the weakness of the previous session, but a revival in risk appetite in global financial markets kept a lid on its gains. German investor sentiment was less pessimistic than expected in October, even as the view of the current economic situation left little room for optimism following a tumble in confidence the month before.The ZEW economic research institute said on Tuesday its economic sentiment index grew slightly in October, to -59.2, from -61.9 in September, beating a forecast by analysts polled of a reading of -65.7. The euro was a touch higher at $0.9866 .Immediate resistance can be seen at 0.9928(38.2%ib), an upside break can trigger rise towards 0.9953(38.2%ib).On the downside, immediate support is seen at 0.9758(9DMA), a break below could take the pair towards 0.9714 (23.6%ib).
GBP/USD: The pound initially dipped but recovered ground on Tuesday as the new British finance minister's decision to reverse most of the government's mini-budget prompted investors to reassess the outlook for UK interest rates.Jeremy Hunt, who replaced Kwasi Kwarteng as finance minister after Prime Minister Liz Truss sacked the latter for his failed fiscal plan that sent the government bond market into a damaging tailspin, ditched most of the contents of the mini-budget and said he would raise over 30 billion in taxes.Sterling was up 0.27% against the dollar at $1.1347. Immediate resistance can be seen at 1.1419 (38.2%fib), an upside break can trigger rise towards 1.1556 (Higher BB).On the downside, immediate support is seen at 1.1254 (5DMA), a break below could take the pair towards 1.1097(23.6%fib).
USD/CAD: The Canadian dollar weakened against the greenback on Tuesday, pulling back from a near two-week high, as oil prices fell and investors braced for domestic inflation data that could impact bets on further Bank of Canada interest rate hikes. Economists expect Canada’s inflation report, due on Wednesday, to show further easing of inflation pressures in September. In domestic data, housing starts climbed 11% in September from August, posting their highest level in 10 months. The loonie was trading 0.6% lower at 1.3785 per U.S. dollar, or 72.54 U.S. cents, after earlier touching its strongest level since Oct. 6 at 1.3658. .Immediate resistance can be seen at 1.3801(23.6%fib), an upside break can trigger rise towards 1.3896 (Higher BB).On the downside, immediate support is seen at 1.3700(20DMA), a break below could take the pair towards 1.3596(38.2%fib).
USD/JPY: The dollar touched fresh 32-year high on the yen on Tuesday as investors braced for any sign of central bank intervention. Investors have been watching out for any signs of further intervention by the Bank of Japan, with authorities repeatedly warning of a firm response to overly rapid yen declines. Finance Minister Shunichi Suzuki warned on Tuesday that Japan would take appropriate and decisive action against excessive, speculator-driven currency moves, keeping alive the possibility of more market intervention after the yen hit a new 32-year low. The yen slipped to 149.10 to the dollar on Tuesday, its weakest since August 1990, putting the major psychological barrier of 150 in focus. Strong resistance can be seen at 149.45 (23.6%fib), an upside break can trigger rise towards 150.00 (Psychological level).On the downside, immediate support is seen at 148.18(5DMA), a break below could take the pair towards 147.85(38.2%fib).
Equities Recap
European stocks closed higher on Tuesday, with investors continuing to react positively to the U.K.'s decision to scrap most of Prime Minister Liz Truss's fiscal polices, and on new EU measures to tackle energy prices.
UK's benchmark FTSE 100 closed up by 0.24 percent, Germany's Dax ended up by 0.92 percent, France’s CAC finished the day up by 0.44 percent.
Wall Street stocks closed higher and Treasury yields dipped on Tuesday as upbeat earnings and better-than-expected factory data stoked a risk-on rally.
Dow Jones closed up by 1.12% percent, S&P 500 closed down by 1.14% percent, Nasdaq settled up by 0.90% percent.
Treasuries Recap
U.S. Treasury yields slipped across most maturities in choppy trading on Tuesday, tracking for the most part moves in UK and European bonds, as recent measures by the British government to stabilize its bond market eased a bit of investor anxiety that has led to some short-covering.
U.S. benchmark 10-year yields fell for the first time in four days. They were last down nearly 2.5 basis points (bps) at 3.9901%.
Commodities Recap
Gold prices crept higher for a second straight session on Tuesday, underpinned by a retreat in the dollar, but gains were kept in check by prospects of further large Federal Reserve interest rate hikes.
Spot gold was up 0.1% at $1,651.50 per ounce by 12:37 p.m. ET (1637 GMT). U.S. gold futures fell 0.4% to $1,656.60.
Oil prices settled lower on Tuesday on fears of higher U.S. supply combined with an economic slowdown and lower Chinese fuel demand.
Brent crude futures settled down $1.59, or 1.7%, to $90.03 per barrel, while U.S. West Texas Intermediate (WTI) crude settled down $2.64, or 3.1%, to $82.82 per barrel.