Investment Bank Outlook 27-09-2022

BNY MellonClosing The UK’s Credibility GapIt is abundantly clear that markets do not view the UK Chancellor’s budget plans as credible. While market participants will remain on guard for potential action from the Bank of England to stabilise the pound, its Monetary Policy Committee is realistically only in a situation to be reactive and play catch-up – unless the government makes changes to its current fiscal strategy. BoE Governor Bailey’s statement on Monday also suggests willingness to sit out the current stress and await more details from the Treasury before proceeding.We think a good first step is introducing transparency. The Treasury on Monday announced that the independent Office for Budget Responsibility (OBR) will publish updated forecasts by the end of the year. This is insufficient, in our view, as one of the reasons behind the Gilt selloff was the lack of any costing plan. The process itself was already deemed insufficient, so arguably a modest fiscal stimulus without fiscal forecasts would have generated an adverse reaction, let alone something on the scale announced. That the chancellor said more tax cuts would come in subsequent budgets came as an even bigger shock.With confidence in financing the government already at extreme lows, it is imperative that the revenue angle be established (now set for Nov. 23). Even if the forecasts are adverse, they would at least give markets enough information to adequately assess the requisite risk premia. Anything less would likely entail investors adopting the worst-case scenario and force the BoE into sub-optimal decisions, with risks to the wider economy.The only information released so far has been from the Debt Management Office, which announced a massive revision to Gilt issuance forecasts for the remainder of the year. The entire September revision documented an increase of GBP62.4bn in issuance (+47%) compared to the April revision, which was already an upward revision from the original Spring Statement. The issuance will help support the government’s energy-price schemes and announced tax cuts. For example, the original Spring Statement included a hike to National Insurance fully hypothecated to support the National Health Service and other pressures on the healthcare system. The government has removed the hike but committed to funding, and this can only be attained through increased borrowing.Previously, we noted that the Gilt market did not react adversely to the energy-support plan because of passive investment and a very favourable maturity profile, which at almost 14 years is twice the G10 average. The long-term structure should hold, but the market will be concerned about the increase in short-term supply, which accounts for more than half of the planned increase (see distribution below). In addition, the BoE will be adding supply to the market through Gilt sales, and this has led to the reaction in the front end.

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What makes up the price of a litre of petrol?

The cost of filling the average car with fuel is falling, but is still approaching £100. How is that made up? Saloni Sardana explains just what makes up the price of a litre of petrol.

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Daily Market Outlook, September 27, 2022

Daily Market Outlook, September 27, 2022 Overnight Headlines Fed Officials Stare Down Markets, Repeat Inflation Top Focus Pound Under Siege With Mounting Odds It Will Drop Below $1 Yuan Plunge Nears 14-Year Low, Inviting Aggressive PBoC Pushback Biden Tells Oil Companies ‘Bring Down Prices You’re Charging’ PBoC Makes Biggest Cash Injection Into System Since February China Growth Falls Behind Rest Of Asia, First Time Since 1990 China Officials Ask Funds To Stabilise Markets Before Congress Japan 20-Year Yield Rises Above 1% For First Time Since 2015 ECB’s De Cos: Remain ‘Extremely Vigilant’ Of Inflation Outlook Kwarteng Heads For Tough Meeting With Top London Bankers Labour Surge In Polls As ‘Clown Show’ Economics Deter Voters Plunging Pound Steadies As Investors Await Officials Response Iraq Oil Minister: OPEC Monitoring Prices, Seek Market Balance Goldman Sachs: Go Underweight Equities Amid Real Yields Rise Oil Rebounds From Lowest Since January On Pause In Dollar Rally Gold Firms On Dollar Pullback, Rate Hike Jitters Cap Increases US Futures Rise After S&P, Dow Close At Lowest Levels Since 2020The Day Ahead Risk tone in Asian markets appeared to improve and the US dollar softened. Treasury yields fell back, although latest US Fed remarks remained hawkish. In sterling markets, the initial reaction of the pound was renewed weakness following the statement issued by the Bank of England and the Treasury, but it appeared to stabilise overnight. The Bank indicated that it intends to make a full economic assessment at the next scheduled policy meeting in early November, perhaps dampening expectations of an inter-meeting rate hike. The Treasury said the Chancellor will deliver a Medium-Term Fiscal Plan on 23 November accompanied by a full OBR economic forecast update. Amid high levels of volatility in sterling markets, there will be significant focus on a scheduled speech this afternoon by Bank of England MPC member and Chief Economist Huw Pill. The speech is entitled, “Economic and Monetary Policy Challenges Ahead”. Pill voted with the majority at the latest policy update only last Thursday for a 50bp rise in Bank Rate to 2.25%. Other MPC members are scheduled to speak in the rest of the week, including Jon Cunliffe and Swati Dhingra tomorrow. There are several ECB and US Fed speakers in the calendar today as well, as markets anticipate significant further monetary policy tightening. That includes Fed Chair Powell, although the subject matter is digital currencies rather than the economy or monetary policy. Fellow Fed members Evans and Bullard, however, are expected to speak about the economic and policy outlook. ECB Vice President de Guindos is also scheduled to speak. Today’s economic data is focused on the US and includes durable goods orders, house prices, new home sales and consumer confidence. Markets will be looking for confirmation of slowing housing activity as interest rates rise, but the recent fall in global oil prices has a more direct effect on US energy prices and may lend support to consumer confidence. The regional Richmond Fed manufacturing survey will also be released.FX Options Expiring 10am New York Cut EUR/USD: 0.9700 (813M), 0.9750 (442M), 0.9775 (250M) 0.9875 (213M), 0.9900 (453M), 0.9965-75 (510M) USD/JPY: 144.00 (274M) USD/CHF: 0.9700 (690M). EUR/CHF: 0.9520 (390M) 0.9565 (235M), 0.9700 (200M) AUD/USD: 0.6500 (220M), 0.6625 (359M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.00 EUR/GBP selling caps, as sterling jumps Short lived early dip after closing -0.9% on broad based USD strength EUR/GBP -0.65% on GBP demand - likely profit taking after recent sharp rise UK gilts led EZ yields to multi year highs, as winter looms New right wing Italian gov't, an issue for ECB Dail & Weekly moving averages head lower 20 day VWAP bands expand - strong bearish trending signals Asian 0.9584 low and European 0.9701 high initial support, resistance 20 Day VWAP bearish, 5 Day bearishGBPUSD Bias: Bearish below 1.10 Bid from the open, as profits booked on long EUR/GBP +0.7% at the Asian open as EUR/GBP -0.55%, profit taking emerges EUR/GBP jumped 2.9% from Friday's open to Monday's close After Monday's sterling volatility markets remain illiquid and skittish UK fund management assets rise in 2021, but slowdown seen Daily momentum studies conflict, 20 day VWAP bands expand 1.0450 lower 20 day VWAP band a good indicator of an over sold market Close above Monday's NY 1.0934 high would be a positive signal 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bullish above 140 Soft early ahead of psychological 145.00 Off 0.3% early - closed +0.95% with higher UST yields, broad USD strength 145.00 in view, but current move based on USD strength not JPY weakness BoJ intervention more likely when yen weakness is leading the volatility Japan services PPI came in at 1.9%, with July revised from 2.10% to 2% Recent selloff stopped at major 140.86 support Psychological 145.00 first resistance, then pre intervention 145.90 high Monday's 143.20 low then 143.10 initial supports 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .6750 Tracking higher as USD losing some altitude and risk rallies AUD/USD bouncing in early Asia as USD easing across the board Equity markets buoyant with E-minis up 0.55% and Nikkei +0.66% Resistance is at hourly tops peppered between 0.6520/40 USD may correct overbought conditions as altitude sickness sets in Equity weakness may pause as the S&P 500 finds support at June low at 3,636 AUD/USD still trending lower while 10-day MA at 0.6633 caps corrections 20 Day VWAP is bearish, 5 Day bearishBTCUSD Bias: Bearish below 25.3K BTC surges over 5% to trade above 20k again Global revenue from bitcoin mining dropped to $17.2 million a day amid a crypto winter Marathon Digital , Riot Blockchain and Valkyrie Bitcoin Miners ETF down 60+% this year BTC is still down ~58.5% so far this year CFTC - BTC specs +451 contracts, long rises to 577 contracts; BTC -6.23% in period First resistance sited at 21k support now see at 19k 20 Day VWAP is bullish, 5 Day bullish

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Market Update – September 27

• USDIndex – at 113.40 after hitting another new 20+ year high at 114.41, as treasuries continue to rally. 10-year yield surged over 20 bps to test 3.898%, the highest since early 2010. The 2-year was over 13 bps cheaper to 4.340%, a new 15-year peak. The 30-year bond was up only 10 bps to 3.715%, an 8-year high. The curve held in the -44 bp area.
• EUR –  lifted slightly among a general correction in the Dollar, at 0.9652.
• JPY traded at 144.20. Resistance set at 146.00.
• GBP dropped to an all-time low of 1.035 overnight, but bounced to 1.0800 currently. BoE’s Bailey said the Bank will not hesitate to change rates as much as needed while noting he is monitoring the financial markets. That disappointed as the markets hoped to hear something firmer and more definitive on the crash in Cable. The UK100 bounced and managed a fractional gain at the end of the day.

• Stocks: Stock markets started to stabilize overnight and Nikkei and ASX managed gains of 0.5% and -0.4% respectively. Wall Street gave up early gains and closed with losses of over -1.0% on the US30 and US500, with the latter at 3655, piercing the 3666 nadir from June 16, and is the weakest since December 14, 2020. The US100 slid -0.60%.
• USOil close yesterday below $76 (9-month low) on indications that the OPEC+ may enact output cuts to avoid a further collapse in prices.
• Gold – drifted to $1621 outside daily BB.
• BTC – higher at $20,162.
• 

Biggest FX Mover @ (06:30 GMT) NZDUSD (+1.27%). Retest 50-hour SMA at 0.5715, Intraday fast MAs aligning higher, MACD histogram & signal line hold negative but close to 0, RSI rise to 57, H1 ATR 0.00175, Daily ATR 0.00878.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Sterling Free Falls, Where Will It Stop?

UK markets in turmoil as fiscal concerns mount. The new PM’s plan to revive spirits by launching a major round of tax cuts hasn’t really worked. Indeed, in the current situation, where growth constraints mainly lie with the supply side, last week’s mini-budget put the government on course for unsustainable finances and a standoff with the BoE and the result is that bonds and Sterling slid to the trough of 1985, in free fall. The 2-year rate jumped 52 bp to 4.4% this morning, the 10-year is still up 34 bp at 4.16%, with the inversion of the curve flagging recession risks. Cable saw a record low of 1.035 early in the session, but has since managed to move up to a still dismal 1.08. EURGBP is at 0.8993, after touching a session high of 0.93953 – a level last seen early in 2020.

The BOE raised interest rates by 50bp, while a new economic plan failed to ease concerns over the threat of a recession. GBPUSD lost around 3.5% on Friday, hitting a low of 1.0838. Usually, Sterling’s weakness supports the UK market, but this time the buyers gave up with more than 2.2% losses on the UK100. The index fell below 7000 for the first time in three months and closed at 7021. The sell-off was exacerbated by the GfK consumer confidence indicator which fell from -41 to -49, breaking the historical record since 1974. The CBI retail activity indicator fell from 37 in August to – 20 in September. Further decline of economic activity was faster than expected; the composite PMI fell from 49.6 to 48.4 against expectations of 49.0 after the Services index fell from 50.9 to 49.2.

This week will tell whether the UK is already in recession as the final reading of second quarter GDP is due. The latest reading was -0.1% so a small positive revision could be enough to halt a technical recession, but it hasn’t changed the market’s skepticism.

Technical Overview

GBPUSD – Downtrend hit a low of 1.0838 last week and in today’s open shifted again to the downside. In the near future there is no sign of a low point. Long term continued declines still leave key 37-year support at 1.0520 (Feb 1985). However, if projected with Fibonacci Expansion, from the draw 1.2292-1.1404 and 1.1737 the next possible target is at the FE1 38.2% level around 1.0500, and FE 161.8% (+/-1.0300) as Friday’s decline has arrived at FE 100% (1.0850).

GBPUSD, H8

The movement to the upside will be temporarily limited by the support at 1.1404 which is now resistance before making another decline. However the outlook will remain bearish as long as the resistance at 1.1737 remains intact.

Click here to access our Economic Calendar

Ady Phangestu

Market Analyst – HF Educational Office – Indonesia

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Market Spotlight: BOJ's Kuroda Defends Bank's FX Intervention

BOJ Cites Need For Continued EasingThe governor of the Bank of Japan, Haruhiko Kuroda, today defended the BOJ’s intervention in FX markets last week. The BOJ was seen selling massive amounts of USD in its first such operations since 1998, in a bid to counter further depreciation of the Yen. Kuroda cited the need to conduct operations in this manner so as to allow negative rates to stay in place to help shore the up the economy.Commenting at a business conference in Osaka, Kuroda explained that “The intervention was conducted by the finance minister’s decision as a necessary means to deal with excessive moves and I think it was appropriate.” In terms of the BOJ’s broader monetary policy, Kuroda explained that monetary easing was still required given that the bank deems the current cost-push inflation unsustainable, with price growth likely to fall back under the BOJ’s 2% target next year.Looking ahead this week, the latest BOJ meeting minutes on Wednesday are likely to outlined the BOJ’s ongoing commitment to maintaining easing in the economy. With the BOJ committed to accommodative support, it is difficult to see JPY avoiding further losses aside from the safe-haven support we’re seeing as equities plummet on recession fears.Technical ViewsUSDJPYThe USDJPY remains well within the bull channel which has framed the rally this year. The BOJ intervention has failed to produce a meaningful downside move and, while price holds above the 139.56 level support, the focus is on a continuation higher and an eventual break above the current 146.97 resistance.

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The hidden cost of employee share schemes

Paying employees in shares comes at a cost to investors – but it isn’t always easy to see how much, says Stephen Clapham.

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Daily Market Outlook, September 26, 2022

Daily Market Outlook, September 26, 2022 Overnight Headlines UK Pound Plunges To All-Time Low As Fiscal Plan Spurs Exodus Fed’s Bostic: US Could Have A ‘Relatively Orderly’ Slowdown Blinken: China Acting Ever More Aggressively Toward Taiwan Wall Street Banks Prep For Grim China Scenarios Over Taiwan German Ifo Set For Further Decline As Recession Fears Mount Kyiv’s West Allies Up Nuclear Deterrence After Putin’s Threats China Restores Risk Reserves For Derivatives To Support Yuan BoJ Boosts Regular Bond Buying Operation, Yield Nears Ceiling Japan Repeats Readiness Response To Speculative Yen Moves Calls Mount For Assertive, Hawkish BoE Response To Tax Cuts Truss Plans To Cut Taxes Further In New Year, Ease Shortages Germany Secures Just One Tanker Of Gas During Scholz’s Tour Meloni Wins Big In Italian Election To Turn Page On Draghi Era Tech Stocks Face Another 10% Drop, Strong Dollar Hits Profits Financial Crisis Redux Looms In Asia As Major Currencies CrackThe Day Ahead A further wave of risk-off sentiment has weighed on equities at the start of the week. Overnight in the Far East, major stock markets have fallen further, following on from losses globally last week. Flows into the US dollar have continued to push the greenback higher against most other major currencies, heightening speculation that some countries may intervene to support their currencies. Notably, GBP/USD hit a record low around 1.035 earlier this morning, before recovering back to around 1.06, while the euro briefly dropped below 0.96 vs the dollar. Meanwhile, following yesterday’s Italian election, Giorgia Meloni – the leader of the far-right Brothers of Italy party - was on track to become the country’s first female prime minister. Over the past week, markets have been rattled by a further tightening of monetary policy from a series of central banks. Most prominent was the 75-basis point interest rate hike from the US Federal Reserve; the Bank of England also announced its second successive 50bp rise; while other central banks to tighten included those of Norway, Sweden and Switzerland. Possibly of most concern to markets was that most of them signalled that further hikes remain very likely. The new median forecast of the Fed’s policymakers implies about 125bp more of interest rates rises by year end with rates expected to rise at least a little further in 2023.In response to this news equities have had another rough week as concerns about global economic growth continued to mount. Later today, the OECD will publish its latest assessment on the global growth outlook. In its previous update in June, the organisation slashed its estimate for this year to just 3%. Today’s calendar is littered with a number of speakers from the major central banks. ECB President Lagarde along with Governing Council members Guindos, Nagel, Panetta and Centeno are all scheduled to speak today at separate events. Later this week, eurozone inflation is expected to print at a record high, keeping the pressure on the ECB to deliver further hikes in interest rates, following the 125bp worth of increases implemented over the past few months. However, with signs of growth slipping and ongoing market turmoil, today’s comments will be watched closely for insight into how policymakers are likely to proceed. Today’s German IFO survey for September is expected to provide a timely reminder that the Eurozone’s largest economy continues to cool. Expect the headline business climate measure to drop to 86.9, reflecting declines in both the future expectations and current assessment components. Elsewhere, a number of US Fed members are due to speak, including Bostic, Logan, Mester and Collins. However, it is questionable as to how much further we will learn so soon after the Fed’s hawkish message at its meeting last week. UK-wise, the focus is limited to MPC member Tenreyro's speech this afternoon at an ‘E-Axes Forum’ webinar on climate change. However, in the absence of any views on the near-term policy outlook, markets’ attention on this event is likely to be low.CFTC Data USD spec net long fell in Sep 14-20 IMM period, $IDX +0.01%... Data somewhat stale considering Friday's outsized rise, GBP -3.5%, EUR -1.5% Next weeks data taking into account recent moves likely more instructive EUR specs +45,286 contracts flip position to +33,449; EUR flat in period $JPY -0.62% in period, yen specs -558 contracts now short 81,280 GBP$ -0.95% in period, specs +13,243 contracts short reduced to 54,843 CAD specs -10,369 contracts now +2,056; Fed rate path moves higher than BoC AUD specs +17.294 contracts, short reduced to 40,556; AUD -0.51% in period BTC specs +451 contracts, long rises to 577 contracts; BTC -6.23% in period Source: Reuters DataFX Options Expiring 10am New York Cut EUR/USD: 0.9500 (391), 0.9550 (201M0.9650 (246M) 0.9700 (327M), 0.9720 (627M), 0.9750 (281M), 0.9800 (594M USD/JPY: 143.35-37 (451M), EUR/CHF: 0.9450 (400M), 0.9600-10 (280M), 0.9650 (250M) AUD/USD: 0.6550 (1.1BLN), 0.6725 (464M) USD/CAD: 1.3500 (325M), 1.3600 (874M) USD/ZAR: 17.6980 (426M)Technical & Trade ViewsEURUSD Bias: Bearish below 1.0250 EUR/USD – Dives to fresh 20 – year low before quick recovery EUR/USD traded to 0.9528 in a flash due to plunge in GBP/USD EUR/USD has recovered to 0.9650/60 after GBP/USD reclaimed 1.0500 FX market thin and volatile due to GBP uncertainty following UK mini budget EUR/USD broke minor support at a 2002 monthly low at 0.9608 There isn't a lot of technical support ahead of 0.9000 but market over-sold 20 Day VWAP bearish, 5 Day bearishGBPUSD Bias: Bearish below 1.10 Sterling in free fall in volatile illiquid markets Sterling is in free fall in Asia - fallout from the growth package extends Weekend analysis of the economic package is broadly negative Markets are illiquid and highly volatile - trades off 3% at present Traded a 1.0327-1.0845 range so far in Asia, after closing art 1.0853 Move through parity would be a disastrous start for the new UK government Sterling mayhem continues; all eyes on the BoE 20 Day VWAP is bearish, 5 Day bearishUSDJPY Bias: Bullish above 139 Moves higher with UST yields and U.S. dollar +0.4%, as tumbling sterling and higher UST yields supported the U.S. dollar 2yr U.S. Treasury yields +3bp 4.246%, 10yr +4bp 3.730% and 30yr +2bp 3.638% Trades towards the top of a 143.20-144.08 range, after soft PMI Fin Min Suzuki ready to respond to speculative yen moves Yen move today led by USD strength not yen weakness, so BoJ side lined Risk off in regional equity markets after Wall Street Friday, Nikkei -2% 20 Day VWAP is bullish, 5 Day bullishAUDUSD Bias: Bearish below .70 AUD/USD opened 0.6518 after closing Friday -1.67% at 0.6530 After trading at 0.6537 it came under pressure when GBP/USD started to fall AUD/USD spiked down to 0.6487 before recovering when GBP/USD bounced off low AUD/USD traded 0.6534 before easing late morning to 0.6495/0.6500 Late move lower tied to fall in equities with E-minis easing over 0.50% The strong USD weighing on commodities with Dalian iron ore falling 2.0% AUD/USD closing in on the 61.8 of the 0.5510/0.8007 pandemic move at 0.6463 20 Day VWAP is bearish, 5 Day bearishBTCUSD Bias: Bearish below 25.3K BTC back below 19k BTC is still down ~58.5% so far this year CFTC - BTC specs +451 contracts, long rises to 577 contracts; BTC -6.23% in period Thomas Bravo to pause investments in crypto companies – FT 20 Day VWAP is bearish, 5 Day bearish

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Investment Bank Outlook 26-09-2022

BNY MellonThe Message Gets Through, FinallyThe FOMC last week finally broke the spell markets had been under, leaving them now spooked by the prospect of the 'pain' that Chair Powell has warned is the price of the Fed's anti-inflation push. Adding to the disquiet, Japan's intervention to support the yen was predictably ineffective after roughly 24 hours, calling into question whether anything can stop the US dollar’s prolonged ascent. And to end a wild week, the new UK government’s mini budget was greeted with an equally predictable negative verdict by financial markets.Five of the six G10 central banks that met last week raised interest rates, the Bank of Japan the notable and – again – predictable exception. The message finally got through to markets. But interestingly, a total of 350 basis points in combined hikes by the other central banks still didn’t dent the dollar’s pre-eminence in the current FX pecking order.US forward curves finally moved to levels that reflect what we think is appropriate for rates in this cycle, peaking at 5% by the end of Q1 2023. Furthermore, they no longer price a quick move to rapid rate cuts thereafter, as the chart below shows, in which we compare Eurodollar futures at several key recent dates, including the days of recent FOMCs and Chair Powell's speech at Jackson Hole.This past Friday’s pricing, helped along by the September dot plot from the Summary of Economic Projections (SEP), seems to show markets and the Fed in broad agreement – if anything, the market is even more aggressive for the remaining two FOMC meetings this year. As we said, the message got through and the spell has been broken: rates are going higher, even at the cost of a recession, which Chair Powell could not rule out at his press conference.Moreover, as Powell also warned, “the Committee is committed to getting to a meaningfully restrictive stance of policy and staying there until we feel confident that inflation is coming down.” Rates aren’t going to quickly drop once they have reached their terminal level. The markets have finally realized – long coming, in our opinion – that this is the policy path, and understandably have not liked the implication.

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Market Update – September 26 – Sterling Slumps

• USDIndex – surged to 114.40 before settling at 113.64. 10-year yields jumped 5.5 bp in Australia and are currently 7.6 bp higher in the US. 2-year Treasury yields broke above 4.3% to a new 15-year high.
• EUR –  The Eurozone, and the wider EU are also facing the challenge of a new right-wing government in Italy, with Draghi’s likely successor not only the first woman, but one with far-right convictions that could bring her in confrontation with Brussels and Frankfurt. EURUSD at 0.9635.
• JPY Japan’s Finance Minister threatened further intervention today, but the Yen was again under pressure and fell about 0.6% to the weaker side of 143.86.
• GBP dropped to an all-time low against the USD (at 1.033) as Friday’s mini-budget intensifies concern about the fiscal situation. Speculation of an emergency response from the Bank of England, as confidence evaporated in Britain’s plan to borrow its way out of trouble, with spooked investors piling into US dollars. Currently settled at 1.0615.

• Stocks: Eurozone stock futures are selling off, in tandem with US futures while the UK100 future has found a footing as the slump in Sterling lends a helping hand. Across Asia the Nikkei closed -2.6% lower, the ASX declined -1.6% and Hang Seng and CSI 300 have lost -0.02% and -0.52% respectively so far.
• USOil plunged as recession concerns mount and USOIL is at $77.58. Attention turnes to OPEC+, on Oct. 5, after agreeing to cut output modestly at their last meeting.
• Gold – drifted to $1636, with next floor at $1560.
• BTC – hovering around 2-month low at $18k area.

Overnight & Today – China steps up fight to support the yuan. The PBOC announced today that it will impose a 20% risk reserve requirement on banks’ foreign-exchange forward sales to clients. The currency is heading for the lower end of the allowed trading band against the dollar, despite stronger than expected fixings since August. Officials have also reduced the banks’ foreign-currency reserve requirements earlier this month to boost the yuan, but so far, the measures haven’t really halted the slide in the currency and today’s move is also not expected to do much more than slow the slide.

Biggest FX Mover @ (06:30 GMT) EURGBP (+2.19%). Topped at nearly 2 years highs at 0.9250, before correcting back to 0.9045. Intraday MAs aligning lower, MACD histogram & signal line hold positive, RSI declines to 61, H1 ATR 0.0065, Daily ATR 0.0094.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Bitcoin Forecast: Potential Jump Ahead

The price of Bitcoin keeps moving along the supporting level of 19000 without breaking it down. Bitcoin is likely to pull back from the level of 19000 and target the level of 22000 next.The price of the currency pair EUR/USD broke the support at the level of 0.9865 and dropped. This asset should get back to the broken level, pull back, and drop again.American stock index S&P 500 is approaching a very important supporting level of 3639. The asset is likely to pull from this level and hit the level of 3900 next. So, it will be important to follow the asset’s price movements at this level later.

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Investors flee both stocks and bonds sending the US dollar to a multi-year high

Bond and equity markets’downward rally intensified on Friday amid signs of escalation of the conflictin Ukraine. The two sides of the conflict have moved to raise the stakes,Russia is going to hold referendums in the occupied territories while the EU isgoing to accelerate for the introduction of a energy price cap (which may havea reaction from Russia in the form of export duties on energy), investors bracefor a recession in the EU and the UK anticipating a surge in government borrowingand spending intended to smooth the impact of the energy shock, and are thereforedumping sovereign debt. Yield on UK 10-year bond have risen by nearly 1% sinceearly September:At the same time, the poundsterling fell by almost 2% on Friday to 1.1050. The pound has become much morevulnerable to a fall after the Bank of England decided on Thursday to raiserates by just 50 basis points, well behind the Fed or the ECB in the tighteningrace. Adding to the negative news, the Monetary Policy Committee was in favorof an even smaller rate increase, by only 25 bp. UK sovereign debt is rapidlybecoming unattractive to investors.The growth of fears of arecession in the world is best seen in the dynamics of the commodity market.Oil quotes collapsed on Friday by an average of 5% on expectations of aslowdown in demand for energy. WTI is trading below $80 a barrel, the lowestlevel since January.Goldman Sachs cut itsyear-end target for the S&P 500 by 16% to 3,600. The Bank's analystsbelieve that a "hard landing" of the economy (lowering inflation dueto a recession) is inevitable and that investors need to focus on the magnitude,duration and timing of the recession. Most fund managers surveyed by GoldmanSachs believe that in order to quell inflation, the Fed will need to raiserates to levels that will trigger a recession in 2023.Bank of America, in turn,warned that the worst outflow experienced by the global sovereign debt marketsince 1949 has dramatically increased the likelihood of defaults and forced liquidationsin crowded trades with investors.Based on EPFR data, BoFAreported that investors withdrew $6.9 billion from sovereign debt funds in theweek ending Wednesday. Equity funds posted a $7.8 billion outflow. At the sametime, investments in cash grew by $30.3 billion. Investor expectations havefallen to their lowest level since the 2008 financial crisis.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/investors-flee-both-stocks-and-bonds-sending-the-us-dollar-to-a-multi-year-high"
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Mini-Budget: stamp duty and income tax cut as Kwarteng targets growth

Chancellor Kwasi Kwarteng announced sweeping tax cuts in his mini-Budget statement. Here's what was said.

from Moneyweek RSS Feed https://moneyweek.com/personal-finance/tax/605359/the-main-points-of-kwasi-kwartengs-mini-budget
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Live Cattle Futures ( LE1! ), H4 Potential for Bullish Rise

Type: Bullish RiseKey Levels:Resistance : 147.900 Pivot: 144.275 Support : 141.100Preferred Case:On the H4, with price moving along the ascending trendline and above the ichimoku indicator, we have a bullish bias that price will rise from the pivot at 144.275 to the 1st resistance at 147.900 where the 127.2% fibonacci extension is.Alternative Scenario:Alternatively, price could break pivot structure and drop to the 1st support at 141.100 where the overlap support is.Fundamentals:No Major News

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/live-cattle-futures-le1-h4-potential-for-bullish-rise-23"
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