- USDIndex – Slumped to under 110.00 to 109.40. US new home sales dropped -10.9% in September, in line with expectations and BOC surprised markets with only a 50bp interest rate hike to 3.75%. Macklem had suggested more concern over risks from higher inflation following the rise in the latest CPI data. However, it will continue to tighten, sees terminal rate at 4.5%, there is still “excess demand,” in the economy and that a technical recession is just as likely as modest growth, cutting 2022 growth forecast to 3.3% from 3.5%, 2023 to 0.9% from 1.8%, and 2% in 2024 from 2.4%.
- Stocks sank (NASDAQ +2.25%) underperformed. Poor earnings and guidance from big tech (Google plunged -9%), and then Meta (-5.6%) missed and sank -20% after hours, wiping $67 billion off its market cap. Concerns over Apple and Amazon today. Asian markets rose initially but closed mixed. (Nikkei –0.32%, Hang Seng 1.60%), European FUTS also mixed. AUD imports prices 3 x higher than expected, but German GfK Consumer Climate not as bad as expected.
- EUR – leaped over parity 1.0000, land topped at 1.0093 earlier, now ahead of the ECB at 12:15 GMT.
- JPY – Cooled again, under 146.00 to 145.40 lows, ahead of the BOJ rate announcement later tomorrow. Friday’s pre-BOJ intervention peak took the pair to 152.00.
- GBP – Sterling rallied again (another 150+ pips) yesterday to test 1.1600 and trades to 1.1645 today. UK’s mid-term Fiscal statement was postponed from Monday to Nov. 17 as Gilts continue to recover with tax rises and spending cuts expected.
- Stocks – Wall Street were mixed with big moves for Tech stocks in particular. US500 closed -28.5 (-0.74%) at 3830, FUTS trades at 3850 now.
- USOil – rallied from $84.35 lows again yesterday to test $88.40 after inventories showed draw downs, back to $87.60 now. IEA Oil Inventories – big build 2.588M vs 1.029M.
- Gold – weaker USD helped a rally to $1675, yesterday before moving back to $1662 now.
- BTC – rallied again to test $21.0k, back to $20.7k now and holding the important $20k.
Today – ECB Announcement & President Lagarde’s PC, US Quarterly PCE Advance, GDP Advance and Durable Goods. EARNINGS – Amazon, Apple, Intel, Caterpillar, McDonalds, Gilead, AB InBev, Credit Suisse, (in-line), Deutsche Lufthansa, and more.
Biggest FX Mover @ (06:30 GMT) GBPJPY (-0.71%) Tank from over 170.00 yesterday to 168.80 now. MAs aligned lower, MACD histogram & signal line negative & falling, RSI 28.05, OS but still falling, H1 ATR 0.299, Daily ATR 2.762.
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Stuart Cowell
Head Market Analyst
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