USD moved higher (USDIndex 102.78), Stocks also higher into close (NASDAQ 0.40%) but Futures rocked (-0.60%) by a surprise 50 bps hike from the RBA (25-40 bp expected) and noises that there will be more to come. Yields rallied (US 10yr over 3.00%), Asian markets have mostly slipped, (Nikkei +0.10%) and YEN has tanked (USDJPY at new 20-year high). UK PM Johnson survives no confidence vote (211 vs 148) 41.2% of his own MPs want him out UK Gilts rally GBP sinks. Oil slips but holds on to gains, Gold pressured by rising yields.
- USDIndex rallied to 102.82 ahead of ECB on Thursday & US CPI on Friday.
- Equities – USA500 -12 (-0.31%) at 4121, US500FUTS at 4096 now. More worries, following aggressive RBA, TWTR -1.5% after MUSK suggested he could walk away from the deal, AMZN +2% after 20 for 1 stock split. DIDI +23% & BABA +6%, Chinese regulators are reported to have concluded DIDI investigation.
- Yields 10-year yield higher (2.987% at close), trades at 3.064% now.
- Oil & Gold had weaker sessions – USOil slipped from $120.00 handle to $119.36, Gold sank as Yields rallied from over $1858 to $1840 now.
- Bitcoin rally over $30K was short lived, from $31.8K yesterday to trade at $29.4K now.
- FX markets – EURUSD at 1.0680, under 1.0700 again, USDJPY tested 133.00 zone and holds 132.60, Cable trades down at 1.2430,following political upheaval in UK.
Overnight – Mixed data from Japan, Weak UK Housing data and German factory orders missed significantly (-2.7% vs -0.4%)
Today – UK Composite/Services PMI (Final), Canadian Trade Balance
Biggest FX Mover @ (06:30 GMT) USDJPY (+0.67%). Rallies to new 20-yr highs and within a smidge of 133.00 from sub 130.00 on Friday. Next key resistance 134.00 form the Weekly Chart. MAs aligning higher, MACD histogram positive, RSI 77, OB & rising, H1 ATR 0.233, Daily ATR 1.18.
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Stuart Cowell
Head Market Analyst
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