Daily Market Outlook, October 1st, 2021

Daily Market Outlook, October 1st, 2021 Overnight Headlines Asian Factories Stagnate As China's Slowdown, Supply Constraints Hit Japan Business Mood Improves As Firms Raise Investment Plans BoJ Debated Risks From Supply Constraints, China Slowdown - Sep Mins Japan’s Kishida Plans To Dissolve Parliament Oct. 14 - Jiji Japan's Kishida To Name Yamagiwa As Economy Minister - Kyodo Growth Accelerates For The Australia Manufacturing Sector In Sep European Union Postpones FTA Negotiations With Australia China Orders Top Energy Firms To Secure Supplies At All Costs China Boosts Rare-Earth Quota 20% To Shield Supply Chain From US North Korea Says It Has Test-Fired An Anti-Aircraft Missile Dollar Heads For Best Week In Months As Fed Tightening Looms Oil Slips As OPEC+ Weighs Output Boost For Tight Market OPEC+ Considers Options For Releasing More Oil To The Market Asia Stocks Fall On Concern Over U.S. Bill Vote, China Energy Wall Street Posts Monthly Loss, Worst Quarter Since Covid Outbreak BMW Lifts Guidance as Higher Car Prices Counter Chip Woes GM, Ford Extend Some Production Cuts Due To Chip Shortage The Day Ahead Economic Data (GMT) • 06:00 DE Aug Retail Sales MM 1.5% f'cast, -5.1% prev; YY 1.9% f'cast, -0.3% prev • 07:50 FR Sep Mfg PMI 55.2 f’cast, 55.2 prev • 07:55 DE Sep Mfg PMI 58.5 f'cast, 58.5 prev • 08:00 EZ Sep Mfg PMI 58.7 f'cast, 58.7 prev • 08:00 EZ Sep HICP Flash YY 3.3% f'cast, 3.0% prev • 08:30 GB Sep Mfg PML 56.3 f'cast, 56.3 prev Looking Ahead – Events, Other Releases (GMT) • 15:00 ECB Schnabel speaks at an NY Fed evenG10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby) EUR/USD: 1.1570-75 (443M), 1.1600 (440M), 1.1700 (390M) 1.1710-20 (500M), 1.1800-10 (443M), 1.1850-60 (900M) 1.1880-95 (660M) USD/JPY: 109.50 (450M), 110.00 (400M), 110.50 (425M), 110.65-70 (1.1BLN), 111.00 (1BLN) GBP/USD: 1.3550 (340M), 1.3800 (203M) AUD/USD: 0.7200 (1.7BLN), 0.7250 (505M), 0.7300 (285M) USD/CAD: 1.2575-80 (932M), 1.2600 (1.83BLN), 1.2700 (900M) 1.2715-25 (1.2BLN), 1.2750 (907M), 1.2775 (503M) 1.2800 (1.43BLN), 1.2850 (2.04BLN), 1.2900 (650M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.17 Bullish above EUR/USD in stasis at lows, same for EUR crosses EUR/USD, EUR crosses in stasis at recent lows, heavy with risk off Trading very light given China/Hong Kong holidays, Australia off Monday EUR/USD 1.1564-83 EBS, above 1.1563 low o/n, presumed 1.1550 option KOs Defense of these barriers and more below at 1.1500 strike supportive Stops eyed below both levels though, breaks extremely bearish Option expiries today - 1.1560-75 E614 mln, anchor of sorts E549 mln more above between 1.1590-1.1600 strikes EUR/GBP 0.8598-0.8605, steady after o/n fall, EUR/CHF 1.0783-98, heavyGBPUSD Bias: Bearish below 1.36 Bullish above. Soft as risk soured – safe haven USD weighs -0.15% - risk off, on U.S. failure to pass infrastructure plan... Asian bourses fell, E-mini S&P -0.5%, cable traded in a busy 1.3445-80 range UK supply chain issues weigh..., but weakness today on strong USD Charts; momentum studies, 5, 10 & 21 daily and weekly moving averages slide 21 day Bollinger bands expand - strong bearish trending setup 1.3419, 38.2% May 2020 to 2021 top is initial resilient support 1.3593 10 DMA capped the recent fall - now pivotal resistanceUSDJPY Bias: Bullish above 109 Bearish below JPY crosses heavy, risk off at October start USD/JPY on hold in low-111 area after sell-off yesterday on term-end flows Asia 111.24-48 EBS, offers eyed from @111.50, bids from ahead of 111.00 Option expiries supportive, $2.6 bln 110.50-111.00, $1 bln alone at 111.00 Monday to also see $620 mln in expiries between 111.25-30 strikes Talk Japanese investors eyeing timing, levels to buy more US bonds Risk off in Asia and US bonds bid, yields soggy, Treasury 10s @1.480% Despite push back in US yields, bias still up, debt ceiling issue resolved Nikkei -2% @28,861, talk in some quarters tax on stock gains to be uppedAUDUSD Bias: Bearish below 0.73 Bullish above Mixed markets, but the primary trend remains lower Touch firmer, after closing up 0.75% on month end demand and profit taking Mixed markets early - E-mini S&P +0.2%, Brent oil +0.4%, but ASX 200 -1.7% EU postpones Australian trade talks amid submarine deal fallout... Poll forecasts no RBA hike at least till 2024 on soft wages... Charts; 5, 10 & 21 daily and weekly moving averages head south 21 day Bollinger bands head lower - bearish trending setup Initial target is a test of the 0.7106 August and 2021 base Close above 0.7304 21 DMA needed to end downside bias

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