who owns the European Central Bank? European Central Bank governor

US

After a round of soft inflation data triggered a buy-everything relief rally, Wall Street will focus on Fed speak and a plethora of data points that might show the economy remains resilient.  The key economic readings include manufacturing activity, retail sales, and housing data.

There will be no shortage of appearances by the Fed this week. Brainard and Williams speak on Monday, while Tuesday includes speeches by Harker, Cook, and Barr. Wednesday brings Williams, Barr, and Waller, and on Thursday we will hear from Bullard, Bowman, Mester, Jefferson, and Kashkari.

In addition to a swathe of economic releases, traders will also closely monitor big retail earnings from Walmart, Target, Macy’s, and Kohl’s. We should learn more about the health of the consumer and if we should expect a further easing of prices as we enter the holiday season.

EU 

It’s a relatively quiet week for the EU with the two standout economic releases being flash GDP and final HICP. With the economy

ECB press conference brings more fog than clarity

Will The European Central Bank’s (ECB) Interest Rate Decision Meet Market Expectations?

Kamila Szypuła Kamila Szypuła 22.10.2022 10:18
In the current situation, the ECB turns a blind eye to the risk of recession, but is very determined to bring down inflation and inflation expectations. To that end, it is hard to imagine how the ECB could not raise rates again. The economic outlook The economic situation is not looking very good in Europe and the euro area. Recent data showed a worsening picture of the situation. Many experts believe that the region may face a serious recession in the near future. Also the attempts by the ECB to raise the euro exchange rate through further tightening should continue to be ineffective in the near future. The economy is expected to stagnate in the first quarter of 2023. Very high energy prices reduce the purchasing power of the population's income. Moreover, Russia's unjustified aggression against Ukraine continues to undermine the confidence of entrepreneurs and consumers. The steady rise in prices in Europe is making households and businesses prepare for even greater pressure in the coming months. Previous date Economic difficulties have arisen since the start of the covid-19 pandemic. The persistent threats caused by the pandemic continue to pose a threat to the smooth transmission of monetary policy. Nevertheless, the European Central Bank did not manage to raise interest rates at that time and for a long time the rate was at 0.0%. The situation regarding interest rates changed after the second quarter of 2022. Inflation rose sharply, and other macroeconomic data were also not optimistic. For this reason, the ECB decided to raise rates by 50 bp. The first rate hike was expected to be milder, the forecast was at 0.25%. Another hike was also hawkish. And now the rate is 1.25%. It’s true that the ECB has consistently surprised on the hawkish side in the past few meetings, but the positive impact on the euro have been null. Source: investing.com What to expect? The economic background has hardly changed since September. Confidence indicators continue to decline, while data for the third quarter point to a very mild contraction in the eurozone economy. Needless to say, the outlook for the euro area economy is surrounded by an extremely high degree of uncertainty. Price pressures across the economy continued to strengthen and widen, and inflation may increase further in the near term. It is believed that the peak of inflation is close, but the economic situation will depend on the situation related to Russia's invasion of Ukraine. The Governing Council stands ready to adjust all instruments to ensure that inflation stabilizes at the 2% target. Finally, the ECB managed to lead the market expectations and next week's meeting may be the first without such a surprise. According to the minutes from the previous meeting, policy makers at the European Central Bank (ECB) were concerned that inflation might be stuck at a high level, so aggressive tightening was necessary. We can expect that this mood will also replicate at the next week's meeting. The September hike of the ECB by 75bp was expected by the markets, and now it expects that its next move in politics, planned for October 27, will be similar. Contrary to the preparations for the July and September meetings, there was no public controversy about the size of the rate hike. Source: investing.com, ecb.europa.eu
The Outlook Of EUR/USD Pair For Long And Short Position

The Eurozone Economy Is Facing A Deep Recession

InstaForex Analysis InstaForex Analysis 23.10.2022 09:49
The USD/JPY pair was storming the 151.00 mark (we wrote about this in our previous review), gold is falling in price, and the dollar continues to advance. When this article was written the DXY dollar index was near 113.34, remaining in the upper part of the range formed between the local support and resistance levels of 114.74 and 109.96. At the same time, the general upward dynamics of the dollar remains, pushing the DXY index towards more than 20-year highs near 120.00, 121.00. The breakdown of the local round resistance levels of 114.00, 115.00 will be a signal that the DXY index will return to growth. On Thursday, the dollar received support from statistics on the labor market: in its weekly report, the US Department of Labor reported a decrease in the number of initial applications for unemployment benefits (for the week of October 14) to 214,000 thousand (from 226,000 a week earlier ), which is better than economists' expectations of an increase to 230,000. The state of the labor market (together with data on GDP and inflation) is a key indicator for the Federal Reserve in determining the parameters of its monetary policy. The drop in the indicator (the number of initial and secondary claims for unemployment benefits) and its low value is a sign of a recovery in the labor market and has a short-term positive impact on the USD. There were no important macro statistics for the US on Friday. It will appear next week (for more details, see Key economic events of the week 10/24/2022 – 10/30/2022). Also next week, meetings of the three largest world central banks will be held at once: Japan, Canada, the eurozone. As for the latter, its leaders are, in general, set up for another interest rate hike. As expected, at a meeting on Thursday, European Central Bank leaders will again raise the level of key interest rates, by 0.50% or even 0.75%. According to the final estimate, annual inflation in the eurozone in September amounted to 9.9% (below the first estimate of 10.0%). Core annual CPI rose by +4.8%, which is in line with the forecast and the previous 4.8%. According to Eurostat, annual inflation fell in six of the bloc's member states, remained stable in one and rose in twenty. A recent media poll of economists showed that they expect the ECB to raise its deposit and refinancing rates by 75 bps (deposits to 1.50% and the refinancing rate to 2.00%) at the October 27 meeting to contain inflation exceeding the target level by five times. By the end of the year, deposit and refinancing rates are forecast to be 2.00% and 2.50%, respectively. At the same time, the ECB is in a difficult situation as the eurozone economy is facing a recession, with the probability of its onset within a year, and the nature of the recession can be deep and long, given the military conflict in Ukraine and confusion in the European energy market. Despite information from the previous EU leaders' summit, which "managed to reach a common agreement on energy security" with the prospect of creating a cartel of European gas buyers that would deal with the purchase and subsequent distribution, the shortage of gas and oil in Europe will continue to drive inflation. Whether the ECB, which is moving so far with cautious steps, will be able to cope with it is a question that remains open. As for the EUR/USD pair, at the time when this article was written on Friday morning, it was trading near the 0.9740 mark, in the area of a stable bear market. From a fundamental point of view, we should expect at least a strong bearish momentum in the EUR/USD pair, and at a high, a further fall of the pair towards 20-year lows, when it was trading near 0.8700, 0.8600. In general, the downward dynamics of EUR/USD remains.   Relevance up to 13:00 2022-10-26 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/324985
ISM Business Surveys Signal Economic Softening and Recession Risks Ahead

Geopolitics And The Euro (EUR) Situation Are Expected To Deteriorate

InstaForex Analysis InstaForex Analysis 23.10.2022 09:57
Long-term perspective. The EUR/USD currency pair gained 140 points during the current week. We can say that this is one of the best weeks for the euro in recent times, although this growth is very difficult to consider on a 24-hour TF. But on this TF, a global downward trend immediately catches the eye, within which strong corrections are still rare. However, it would be correct to say there are none. As we have already said, over the past 1.5–2 years, the euro currency has shown corrections of a maximum of 400–450 points. And the whole downward trend already exceeds 2500 points. And, of course, it is worth noting that it has been three weeks since the price last updated its 20-year lows, and the pair is still close to these lows. The beginning of an upward trend does not even "smell." Thus, the technical picture does not change. Therefore, it can be assumed that the fundamental and geopolitical backgrounds do not change either. And this is not just an assumption. It is an objective reality since the "foundation" now remains the same as it was a month ago, two months ago, and three months ago. The Fed is also raising interest rates aggressively and is prepared to do so "to the bitter end." The ECB is also simply raising the rate and is already thinking about reducing it because many EU countries may be unable to cope with tight monetary policy. The Fed rate has long been higher than the ECB rate, and the gap between their values may only increase in the coming months. When the Fed ends the rate hike cycle, a "high rate period" will begin, during which monetary policy will not change. Thus, the Fed's monetary policy may remain much tougher than the ECB for another year or two or three. Naturally, this state of affairs will support the dollar. It may not grow all this time, but it will be extremely difficult for the European currency to show tangible growth. COT analysis. COT reports on the euro currency in 2022 can be entered into the textbook as a vivid example. For half the year, they showed a frank "bullish" mood of professional players, but at the same time, the European currency was steadily falling. Then they showed a "bearish" mood for several months, and the euro currency also steadily fell. The net position of non-profit traders is bullish again, and the euro continues to fall. This is happening, as we have already said, because the demand for the US dollar remains very high against the backdrop of a difficult geopolitical situation. Therefore, even if the demand for the euro currency is growing, the high demand for the dollar does not allow the euro currency itself to grow. During the reporting week, the number of buy-contracts from the non-commercial group increased by 6.5 thousand, and the number of shorts decreased by 4 thousand. Accordingly, the net position increased by about 10.5 thousand contracts. This fact does not matter much since the euro remains "at the bottom" anyway. Professional traders still prefer the dollar to the euro currency at this time. The number of buy contracts is higher than sell contracts for non-commercial traders by 48 thousand, but the European currency cannot extract any dividends from this. Thus, the net position of the "non-commercial" group can continue to grow, but it does not change anything. If we look at the general indicators of open longs and shorts for all categories of traders, then sales are 22 thousand more (586k vs. 564k). Thus, according to this indicator, everything is logical. Analysis of fundamental events. There is nothing to note in the European Union this week except for the banal inflation report, which was released in the second assessment for September. Traders expected an increase of 10.0%, but in reality, prices rose only by 9.9% y/y. However, the epithet "only" hardly applies to an ever-growing index. We cannot say that traders were upset about this or, on the contrary, happy. This indicator does not change anything because it cannot affect the ECB's plans in a cardinal way. The European regulator cannot look at the current inflation and decide to raise the rate at each next meeting by 1% to deal with high price growth and not just pretend. There was practically no geopolitical news this week either. Perhaps that is why the euro currency has avoided a new fall. But again, there is no difference since it continues to be near its 20-year lows. Trading plan for the week of October 24–28: 1) In the 24-hour timeframe, the pair resumed their movement to the south. Almost all factors still support the long-term growth of the US dollar. The price is below the Ichimoku cloud and the critical line, so purchases are irrelevant now. It would be best if you waited at least for consolidation above the Senkou Span B line and only considered long positions. 2) The euro/dollar pair sales are still more relevant now. The price formally went above the critical line, but it did not go higher, but the line itself declined, so we expect the fall to continue with a target below the 0.9582 level (161.8% Fibonacci). In the future, if the fundamental background for the euro currency does not improve and geopolitics continues to deteriorate, the euro currency may fall even lower. Explanations of the illustrations: Price levels of support and resistance (resistance/support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.   Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325028
Analysis And Trips For Trading The GBP/USD Pair In Short And Long Positions

The British Pound To US Dollar (GBP/USD) Pair Maintained A Long-Term Towntrend

InstaForex Analysis InstaForex Analysis 23.10.2022 09:59
Long-term perspective. The GBP/USD currency pair has increased by 40 points during the current week and remained above the critical line on the 24-hour TF. Thus, certain chances of a new upward trend are also preserved. We have already said earlier that the pound has more reasons for growth - technical. At least because it overcame the Kijun-sen line sharply and strongly moved away from its absolute lows. However, this is a double-edged sword. The last fall in the pound sterling might not have happened if not for the tax initiatives of former British Prime Minister Liz Truss. In general, her resignation turned out to be very unexpected since, at the beginning of the week, in an interview with Bloomberg, she said she was going to fight and did not intend to leave her post. We did not believe that she would leave voluntarily, and even so quickly, and we still could not announce a vote of no confidence in her in the near future. Thus, most likely, political pressure was exerted on her. However, all this is history and generally not interesting. Now I wonder who will become the new prime minister. And good old Boris Johnson can become one, as he is currently leading in the amount of support from the Conservatives, according to opinion polls. From the same conservatives who dismissed him a few months ago. The political pun in the Kingdom continues. We need to wait for new elections, but the situation will not change dramatically for the pound sterling. Politics is, of course, interesting and important. As we have seen, the Prime Minister's short-sighted decision can collapse the financial markets. However, Johnson is unlikely to make the same mistake as Truss. And even more so, Rishi Sunak, who served as finance minister under Johnson, will not allow it. But in any case, the pound still has big problems with the grounds for growth. Technically, it can show an upward movement, but will one "technique" be enough for market participants? COT analysis. The latest COT report on the British pound showed a new strengthening of the "bearish" mood. During the week, the non-commercial group closed 8,600 buy contracts and opened 3,400 sell contracts. Thus, the net position of non-commercial traders fell by 12.9 thousand, which is quite a lot for the pound. The net position indicator has been growing slightly in recent weeks, but this is not the first time it has been growing. Still, the mood of major players remains "pronounced bearish," and the pound sterling maintains a downward trend in the medium term. And, if we recall the situation with the euro currency, there are big doubts that, based on COT reports, we can expect strong pair growth. How can you count on it if the market buys the dollar more than the pound? The non-commercial group has now opened a total of 91 thousand contracts for sale and 40 thousand for purchase. The difference, as we can see, is still very big. The euro cannot show growth in the "bullish" mood of major players, and the pound will suddenly be able to grow in a "bearish" mood. As for the total number of open buy and sell orders, the bulls have an advantage of over 25 thousand. But, as we can see, this indicator also does not help the pound much. We remain skeptical about the long-term growth of the British currency, although there are certain technical reasons for this. Analysis of fundamental events. During the current week, only one really important report was published in the UK - on inflation. The consumer price index rose by 10.1% y/y and, as we can see, continues to grow, despite the seven increases in the key rate. Many experts suggest that the rate in the UK should be raised to at least 5% to count on a significant reduction in inflation. But is there an opportunity for BA to raise the rate so high with the current financial and economic problems? From our point of view, no, and the ECB, together with BA, will stop tightening monetary policy in the near future. Or they will greatly slow down its pace. Both can create additional pressure on the pound, as the Fed will continue to accelerate its pace at the same time. In general, the prospects for the pound are bad as usual, and rising inflation does not mean that the British regulator will increase the aggressiveness of the monetary approach. Trading plan for the week of October 24–28: 1) The pound/dollar pair as a whole maintains a long-term downward trend but is located above the critical line. Therefore, small purchases can now be considered as long as they are located above the Kijun-sen. The target is the Senkou Span B line, which runs at 1.1843. There are some reasons for the pair's growth, but there are still many reasons for a new fall. Be careful with your purchases. 2) The pound has made a significant step forward but remains in a position where it is difficult to wait for strong growth. If the price fixes below the Kijun-sen line, the pair's fall can quickly and cheerfully resume with targets of 1.0632–1.0357. Explanations of the illustrations: Price levels of support and resistance (resistance /support), Fibonacci levels – target levels when opening purchases or sales. Take Profit levels can be placed near them. Ichimoku indicators (standard settings), Bollinger Bands (standard settings), MACD (5, 34, 5). Indicator 1 on the COT charts is the net position size of each category of traders. Indicator 2 on the COT charts is the net position size for the "Non-commercial" group.     Relevance up to 10:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325030
US Stocks Extend Rally Amid Optimism Over Fed's Monetary Policy

Recent Reports Have Not Helped The Euro To US Dollar Pair (EUR/USD)

InstaForex Analysis InstaForex Analysis 23.10.2022 10:04
  The US dollar index showed contradictory dynamics this week. Initially, at the start of the five-day trading period, it dropped sharply, returning to the area of the 111th figure. The market unexpectedly increased interest in risk, amid quarterly reports of the largest US banks (in particular, Bank of America and Bank of New York Mellon), which exceeded the expectations of most analysts. After that, the main Wall Street indexes went up, while the safe greenback came under pressure. In addition, on Monday it became known that British Prime Minister Liz Truss canceled the key points of her odious anti-crisis plan, which included large-scale tax cuts. And although this step subsequently did not help her stay in the chair of the head of government, directly "in the moment" it increased interest in risky assets. Against this background, the EUR/USD pair reached 0.9875 (one and a half week price high). However, bulls on the pair were unable to develop an upward trend. On Tuesday, the US dollar index turned around and headed upward again. Throughout the week, including on Friday, the pair had been trading within a wide price range, actually circling in the area of 97-98 figures. Traders reacted reflexively and are reacting to contradictory macroeconomic statistics, mainly from the United States. For example, the greenback reacted positively to the published report in the real estate sector: the volume of construction permits issued in America increased by 1.4% in September after a serious decline in August (-8.5%). At the same time, the volume of housing sales in the secondary market (the release was published the next day) unexpectedly decreased, and immediately by 1.5% (with a forecast decline of 0.8%). The Federal Reserve-Philadelphia Manufacturing Index also turned out to be disappointing, which came out at -8.7 in October. While the growth rate of initial applications for unemployment benefits was at the level of 214,000 (a three-week low). The above-mentioned macroeconomic reports (generally of a secondary nature) could not help – neither the EUR/USD bears nor the bulls. Of course, traders reacted to these reports accordingly, but only formally – literally after a few hours, the downward/upward momentum faded away. Obviously, traders need a more powerful informational occasion that will allow them to either approach the parity level or break through the defense at the base of the 96th figure. For the development of the upward corrective movement, EUR/USD bulls need to settle above the 1.0000 mark, and for the continuation of the downward trend, bears need to go below the 0.9600 target. Current macroeconomic statistics are not able to cope with such tasks. In my opinion, EUR/USD traders can only pin their hopes on larger-scale information campaigns. The vector of price movement will be determined primarily by the level of anti-risk sentiment. By the way, Friday's dynamics of the dollar index eloquently illustrated the current situation. So, during the day, the greenback steadily strengthened its positions throughout the market, but at the start of the US session it weakened sharply: it became known that Russian Defense Minister Sergei Shoigu held telephone talks with US Defense Minister Lloyd Austin. According to Russian media, the parties discussed "topical issues of international security, including the Ukrainian issue." These are the second talks between the heads of defense departments this year (the first were in May). Amid general geopolitical tensions, this news was received by the market "with a bang". However, the growth of the EUR/USD pair was limited. Almost immediately, the press secretary of the president of Russia Dmitry Peskov said that following the conversation of the ministers, "there are no plans for a telephone conversation between Vladimir Putin and Joe Biden." However, this moment highlighted the main idea: traders react sharply to news of a geopolitical nature. A decline in anti-risk sentiment can put significant pressure on a safe greenback - and vice versa, an increase in panic will allow dollar bulls to open a second wind. Also, the tone of trading can be set by representatives of the Fed. But, to the disappointment of the EUR/USD bears, the members of the Fed have not yet decided to voice "ultra-hawkish" comments. In particular, many representatives of the central bank spoke this week – Philip Jefferson, Lisa Cook, Michelle Bowman, Patrick Harker, James Bullard, Charles Evans. In one form or another, they made it clear that the Fed is ready to continue taking steps to curb inflation in the United States. In one form or another, they hinted that they are ready to support a 75-point rate hike in November. But the thing is that even before their speeches, the probability of a 75-point rate hike at the November meeting was estimated at 95%! That is, the market has already largely played this fundamental factor. While the members of the Fed are not yet ready to "increase the degree of heat", allowing, for example, a 100-point increase. They are also not ready to talk about more distant prospects (regarding the November meeting) – according to them, further decisions will be made taking into account incoming data, primarily in the field of inflation and the labor market. Thus, traders of the EUR/USD pair in the medium term will continue to trade in the 100-point price range of 0.9750-0.9850. In my opinion, the downward dynamics will resume over time, but at the moment it is impossible to talk about prioritizing short or long positions. Given the current uncertainty, it is advisable to take a wait-and-see attitude for the EUR/USD pair.     search   g_translate       Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325008
The EUR/USD Price May Fall Under 1.0660

Today There May Be Confirmation Of The Bearish Sentiment Of The EUR/USD Pair

InstaForex Analysis InstaForex Analysis 24.10.2022 08:10
On Friday, the head of the San Francisco Federal Reserve, Mary Daly, said that the high pace of rate hikes is slowing down the economy, this pace needs to be slowed down. As a result, yields on government bonds fell, stock indices rose, and the euro closed the day up 75 points. The quote of the single currency again reached the resistance of 0.9864 and the MACD indicator line. The European Central Bank raises rates on the 27th, but we still doubt the market's willingness to switch so quickly from the Fed's leading role in pricing the euro to the ECB's leading position. Eurozone business activity indicators for October will be released today, and a recession is predicted for them. On the technical side, in order to consolidate the euro in the green, the price needs to go above the descending price channel, marked in green on the daily chart, that is, above the level of 0.9950. Price development above 0.9864 (September 6 low) before breaking 0.9950 in this situation is considered as a false exit above the MACD indicator line. Consolidation below this line may bring the price back to support 0.9724. The Marlin Oscillator is already turning down and does not share the optimism of the price. The price is already forming a divergence with Marlin on the H4 chart. As long as it's weak. A decline below the MACD line (0.9797) will set the bearish mood for the euro.       Relevance up to 04:00 2022-10-25 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325066
The Loonie Pair (USD/CAD) Bounces Off An Upward-Sloping Support Line

The Future Of The USD/CAD Exchange Rate Will Depend On The Decision Of Bank Of Canada (BOC)

TeleTrade Comments TeleTrade Comments 24.10.2022 08:40
USD/CAD has accelerated to near 1.3680 amid a stellar recovery in the DXY. The 10-year US Treasury yields have extended their losses to near 4.17% amid soaring market mood. The BOC may trim the extent of the rate hike to 50 bps this week. The USD/CAD pair sensed buying interest after dropping to near the round-level support of 1.3600 in early Tokyo. The loonie bulls have retreated after the US dollar index (DXY) defended the intervention rumors of the Bank of Japan (BOJ) recovered its entire intraday losses. The asset has extended its gains to near 1.3680. The DXY has recaptured its intraday high at 112.26 and is expected to behave critically ahead as the returns on US government bonds have dropped sharply. The 10-year US Treasury yields have extended their losses by 4.17% after displaying jaw-dropping gains to near 4.34% on Friday. Market sentiment is extremely cheerful and S&P500 futures are holding their gains. On Monday, the US S&P PMI data will be keenly watched. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier. This week, the interest rate decision from the Bank of Canada (BOC) will determine the further direction of the asset. A Reuters poll on projections for BOC’s interest rate claims that BOC Governor Tiff Macklem will announce a rate hike of 50 basis points (bps). The extent of the rate hike seems lower than their current pace of hiking interest rates. It is worth noting that the headline inflation rate in Canada was recorded at 6.9% for September. On the oil front, oil prices have dropped below the crucial support of $85.00 amid mounting global recession fears. In addition to the BOC, the BOJ and the European Central Bank (ECB) will announce their monetary policies. The BOJ may continue its ultra-loose stance while the ECB could tighten its monetary policy. An expectation of a fresh rate hike spell is weighing pressure on oil prices.
Prices Of Gold Rose For The Third Straight Session

The Decision Of The ECB May Threaten The Gold Rate (XAU/USD)

TeleTrade Comments TeleTrade Comments 24.10.2022 08:46
Gold price prints mild losses while reversing from one-week high. DXY pares the first weekly loss in three amid geopolitical, market meddling concerns. Fed speakers’ absence, likely hawkish outcome from ECB could test XAU/USD bears. Preliminary readings of US PMI for October, Q3 GDP are also important for near-term directions. Gold price (XAU/USD) remains pressured around the intraday low of $1,652, keeping the week-start pullback from a fortnight top, during early Monday morning in Europe. In doing so, the yellow metal justifies the firmer US dollar, as well as the market’s cautious mood. US Dollar Index (DXY) rises 0.30% intraday to 112.25 by the press time amid chatters surrounding Japan’s meddling in the market to defend the yen, as well as challenges to the risk appetite. That said, the news that both North and South Korea have exchanged warning shots near their disputed western sea boundary, published on Monday, also seemed to have favored the US dollar buyers of late. On the same line could be the fears that China President Xi Jinping won’t hesitate to escalate geopolitical matters with the US when it comes to Taiwan. The reason could be linked to Jinping’s dominating performance at the annual Communist Party Congress after winning the third term in a row. Additionally, ABC News quoted Ukrainian General Oleksandr Syrskiy citing fears of Nuclear war, which in turn might have recalled the US dollar buyers. Recently, news that China announced covid lockdown in the factory hub Guangzhou weigh on the market sentiment and the XAU/USD prices. The latest jump in the market’s bets over the Fed’s 75 bps move in November, from 88% to 95%, also seemed to have drowned the gold prices. Amid these plays, S&P 500 Futures print 0.50% intraday gains while the US 10-year Treasury yields remain offered around 4.17%, extending Friday’s losses from the 14-year high. That said, the US equities posted the largest weekly gains in four months in the latest amid previously receding fears of the Fed’s aggressive rate hike. On Friday, the gold price rose heavily while portraying the first weekly gain in three as the hawkish Fed bets retreat after a mixed Fedspeak. That said, St. Louis Fed President James Bullard said, “I want rates that put significant downward pressure on inflation.” On the same line, Chicago Fed President Charles Evans stated that they will need to raise rates further and hold them for a while. However, Nick Timiraos, Chief Economics Correspondent at The Wall Street Journal (WSJ) wrote that the Federal Reserve officials are barreling toward another interest-rate rise of 75 bps at their meeting in November and are likely to debate then whether and how to signal plans to approve a smaller increase in December. Looking ahead, gold traders should expect further weakness amid dicey markets and challenges to sentiment. However, the absence of the Fed speakers and a likely hawkish outcome from the European Central Bank (ECB) could challenge the XAU/USD downside. Technical analysis Gold price retreats from the 21-DMA hurdle amid bearish MACD signals and sluggish RSI, which in turn suggests the metal’s further declines towards the resistance-turned-support line from October 06, around $1,630 by the press time. However, monthly horizontal support near $1,620, quickly followed by the yearly bottom of $1,614, could challenge the gold bears afterward. In a case where the metal prices drop below $1,614, the $1,600 threshold and the 61.8% Fibonacci Expansion (FE) of June-October moves, near $1,565, lure the XAU/USD bears. Alternatively, the 21-DMA and the 50-DMA, around $1,665 and $1,694 in that order, guard the short-term recovery of gold price. Following that, the $1,700 round figure and the monthly high near $1,730 might be interesting to watch for further upside. Gold: Daily chart Trend: Limited downside expected
China's Position On The Russo-Ukrainian War Confirmed At The G20 Meeting

Asia Stock Markets Are Not Positive, Chinese Markets Have Met An Intense Sell-Off

TeleTrade Comments TeleTrade Comments 24.10.2022 09:23
The third-term leadership of China’s XI Jinping has messed up Chinese and Hang Seng indices. S&P500 futures have extended their gains after an upbeat Friday. Oil prices have dropped amid escalating recession fears. Markets in the Asian domain are not tracking positive cues from S&P500 futures and are displaying terrible price movements. The risk-on sentiment has extremely firmed as 10-US Treasury yields have trimmed further to near 4.15%. Meanwhile, the US dollar index (DXY) is attempting to establish above 112.00 after a roller-coaster move. At the press time, Japan’s Nikkei225 gained 0.57%, ChinaA50 nosedived 2.93%, and Hang Seng witnessed a bloodbath. The index has erased 5.53%. Indian markets are closed on account of Diwali-Balipratipada. Chinese markets have witnessed an intense sell-off after the announcement of China’s XI Jinping's third leadership term.  Investors have dumped equities significantly amid soaring fears of economic slowdown as the Chinese leader could prefer ideology-driven policies even at the cost of economic growth. Apart from that, upbeat Gross Domestic Product (GDP) and Trade Balance data have failed to fetch optimism for investors. Blood has spilled over the roads as indices in Hang Seng have witnessed a bloodbath. The continuation of China’s XI Jinping leadership has strengthened fears of an economic downturn. In Japan, gains in Nikkei225 are weak against the run-up recorded in S&P500. Potential intervention chatters from the Bank of Japan (BOJ) in the currency markets against disorderly yen moves have restricted the upside in Japanese equities. On the oil front, oil prices have dropped below the crucial support of $85.00 amid mounting global recession fears. In addition to the BOC, the BOJ and the European Central Bank (ECB) will announce their monetary policies. The BOJ may continue its ultra-loose stance while the ECB could tighten its monetary policy. An expectation of a fresh rate hike spell is weighing pressure on oil prices.
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

It Will Be Busy Week, Central Bank's Decisions Ahead (BoC, ECB, BoJ), Softer US yields Could Play In Favour Of Gold And More

Swissquote Bank Swissquote Bank 24.10.2022 14:13
Last week ended on a strong positive footage, on hints that some Federal Reserve (Fed) officials have started talking about pausing the interest rate rises to avoid going too far. BoC, ECB & BoJ to decide Softer Fed expectations pulled US yields lower and sent equities higher.On the earnings front, 70% of the S&P500 companies that reported earnings so far did better than earnings expectations, and big US tech companies and oil giants will be reporting earnings this week. In politics, Boris Johnson announced yesterday evening that he will not be running for the PM role this week. That makes the British ex-Chancellor of Exchequer Rishi Sunak the front runner in the contest. Sterling kicked off the week on a positive note, but bumped into 50-DMA resistance. In central banks, the Bank of Canada (BoC) is expected to raise interest rates by another 50bp when it meets this week, the European Central Bank (ECB) will certainly raise its rates by 75bp, while the Bank of Japan (BoJ) is expected to stay pat. The BoJ intervened again in the currency markets on Friday to pull the USDJPY lower, after the pair flirted with the 152 level last week. The pair eased to 145.50 following the intervention and is back to almost 149 at the time of video. Commodities In commodities, US crude trades around $85per barrel level, and gold is better bid. Softer US yields could play in favour of gold if we really start seeing material easing in Fed expectations. But the latter is data dependent. Due this week, investors will closely watch the US latest GDP update, and the PCE index. Watch the full episode to find out more! 0:00 Intro 1:02 Are Fed officials softening tone? 3:23 China GDP better-than-expected, but well below target 4:44 US Big Tech & Oil Giants due to announce earnings 7:54 UK to choose its new PM 8:57 BoC, ECB & BoJ to decide 11:05 Update on crude oil & gold Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Microsoft #Meta #ExxonMobil #Chevron #earnings #UK #PM #Rishi #Sunak #GBP #USD #JPY #BoJ #ECB #BoC #China #US #GDP #XiJinPing #crudeoil #XAU #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___  Let's stay connected: LinkedIn: https://swq.ch/cH
Credit squeezing into central banks – what next?

Growth Of The EUR/USD Pair Could Be Associated With The Future ECB Meeting

InstaForex Analysis InstaForex Analysis 26.10.2022 08:20
EUR/USD 5M The euro/dollar pair alternated between an absolute flat and a strong trend on Tuesday. Recall that at this time the pair's movements are confusing so any development of events should be expected. However, yesterday everything went more or less logically, as the pair was again virtually in the same place during the European trading session, and again traded in a very volatile manner during the US session. There were no reports or events in the European Union and the United States that could provoke a fall in the dollar by 100 points in just an hour. Thus, we are inclined to believe that the nature of this movement was technical. The euro in the long term continues to move away from its 20-year lows, but it is still somehow hesitant. Yesterday's growth could be associated with the future European Central Bank meeting, the results of which will be known on Thursday, but at the same time, the British pound was also growing, which, in theory, should not be reacting to such a factor. But it's good that the euro is at least trying to show growth. There was a difficult situation in regards to Tuesday's trading signals, since the very first one formed in the middle of the US session, when most of the upward movement had already been completed. Thus, after the pair grew by 100 points, it was hardly worth trying to work out a buy signal. The same applies to the second signal to buy near the level of 0.9945, it also formed too late in time. Unfortunately, a pretty good move was missed, but out of 8-10 hours of the daytime, the pair was only following a trend movement for an hour, and it was impossible to predict this breakthrough. COT report: The euro Commitment of Traders (COT) reports for 2022 could be used as good examples. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again and the euro is still dropping. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing. In the given period, the number of long non-commercial positions increased by 6,500, while the number of shorts decreased by 4,000. Accordingly, the net position increased by about 10,500. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 48,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. If you look at the total open longs and shorts for all categories of traders, then shorts are 22,000 more (586,000 vs 564,000). Thus, according to this indicator, everything is logical. We recommend to familiarize yourself with: Overview of the EUR/USD pair. October 26. Four more explosions occurred in the area of the Nord Stream pipelines. Overview of the GBP/USD pair. October 26. The British prime ministerial election ended dull and prosaic. Forecast and trading signals for GBP/USD on October 26. Detailed analysis of the movement of the pair and trading transactions. EUR/USD 1H You can see on the hourly timeframe that the pair continues to form a new upward trend and, if not for yesterday's strong growth that lasted for about an hour, we would say that the pair is preparing for a new fall. But no, it came close to price parity, breaking 400 points off its 20-year lows for the second time in recent weeks. There are still no obvious reasons to buy the euro. They can be highly technical and expressed by the bears' lack of desire to continue selling the euro. On Wednesday, trading could be performed at the following levels: 0.9553, 0.9635, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, as well as Senkou Span B (0.9754) and Kijun-sen lines (0.9838). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also additional support and resistance levels, but trading signals are not formed near them. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. Today there will be no important events or reports scheduled again in the European Union and America. Thus, once again there is a possibility that we might witness a flat or "swing". What we see on the trading charts: Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals. The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines. Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals. Yellow lines are trend lines, trend channels, and any other technical patterns. Indicator 1 on the COT charts reflects the net position size of each category of traders. Indicator 2 on the COT charts reflects the net position size for the non-commercial group.       Relevance up to 02:00 2022-10-27 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325311
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

No Repayment Of TLTRO Loans, The ECB Is Facing A Difficult Task

ING Economics ING Economics 26.10.2022 14:10
The US curve is looking to the end fo the Fed cycle, and bank funding cost is ratcheting higher. The European Central Bank is about to change the targeted longer-term refinancing operations (TLTRO) rules after the game has started. It can save €31bn in interest but early repayments should remain modest In this article The US story continues to hum in a nuanced fashion A change of TLTRO rates is now widely expected Saving the ECB money but repayments to remain more elusive Today’s events and market view The US story continues to hum in a nuanced fashion Two things have happened in the past couple of days. First the structure of the curve has flipped toward a more bullish leaning as the 5yr has resumed an outperformance on the curve as market rates have fallen. This is typical as the market starts to converge on a likely completion of the rate hiking process. Second, the market discount for the terminal rate itself has eased off from the highs. A few days back the fed funds strip was peppering the 5% area. Its now back down to 4.85%. That pulls down the need for the 10yr to ratchet higher. The 10yr had been at 4.25%, and looking up. It’s now closer to 4%, pulled there in part by a slew of weak macro data, and talk that the Fed may be about to ease off on the size of hikes once they deliver the 75bp discounted for November. But there is something else going on too. Sneaky item three. Bank funding costs are now creeping higher. The 3mth commercial paper rate is up to 25bp over the risk free rate, and double that for European names. That’s the beginning of signs of creaking in the system. If the Fed is going to pull back in the face of persistent inflation it is more likely to reflect this than the macro weakness that, after all, they are actively engineering. No panic yet. Just something to monitor. Probably enough there to keep the 10yr above 4% for now, and for it to continue to be re-pressured higher in the weeks ahead. But we are also looking at 4.25% as being quite peakish (with an outside risk to 4.5%). Can’t quite conclude that the 4.25% seen was in fact the high, but these are the things we are looking at. 5Y coming in on the curve indicates a peak in 10Y yield is getting more likely Source: Refinitiv, ING A change of TLTRO rates is now widely expected Heading into tomorrow’s ECB meeting, various press reports have put changing the terms of TLTRO loans to banks as the ECB’s favourite option. The goal is to nudge them to repay, and to reduce a perceived subsidy paid to banks that can currently place these funds back at the ECB at a higher interest rate than they borrowed. As we’ve outlined in earlier publications, all options on the table are potentially disruptive but the central bank seems intent on acting before TLTRO loans fall due, the majority of them as soon as June next year. The question now is what change the ECB will implement. The central bank seems intent on acting before TLTRO loans fall due Changing the borrowing rate from “average interest rate on the deposit facility calculated over the life of the respective TLTRO III during the rest of the life of the same operation” to “average interest rate on the deposit facility calculated over the rest of the life of the respective TLTRO III during the rest of the life of the same operation” would make the borrowing rate identical to the rate at which the proceeds are placed back at the ECB, and eliminate the carry trade opportunity. A change to TLTRO terms would only result in partial repayments Source: Refinitiv, ING Saving the ECB money but repayments to remain more elusive This wouldn’t guarantee immediate repayment of TLTRO loans, however. Likely, these funds have been earmarked by banks for other uses already, and it is probable that some banks don’t have the liquidity available to repay the ECB at the next opportunity in December 2022. Given funding difficulties over year-end some may choose to wait for March 2023 for their early repayments. Finally, we expect other banks would hold on to their TLTRO loans until their maturity given challenging funding environment currently. In the chart below, we illustrate the difference between this early repayment scenario and the original maturities of TLTRO loans. This wouldn’t guarantee immediate repayment of TLTRO loans Of course, the ECB could be more aggressive and add a spread on top of the average interest rate on TLTRO loans to incentivise earlier repayments. This is an option it might pursue if a sharp reduction in excess liquidity is its goal but we think it is far from guaranteed to work, and would end up punishing banks with the most difficulties in accessing funding markets. The other, apparently more important, objective of getting rid of the perceived subsidy to banks, can be achieved without causing such disruptions as desribed above. By this simple change, up to €31bn of interest cost to the ECB disappear. Euro syndicated supply has been above recent years' despite difficult markets Source: Refinitiv, ING Today’s events and market view The economic release calendar is relatively thin today, with only eurozone M3 growth to watch out of Europe, followed by mortgage application, inventories, and new home sales in the US. Instead, the action will be on the supply front. Italy will auction 2Y bonds as well as inflation-linked debt. The US treasury will auction 2Y floating rate notes, as well as 5Y T-notes. The UK will sell 7Y bonds. This will come on top of syndicated supply which has overshot previous years’ average on most weeks since the summer (see chart above for euro syndications). Despite this headwind, short-covering into tomorrow’s ECB could tip price action in favour of lower rates today. TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Kiwi Faces Depreciation Pressure: RBNZ Expected to Hold Rates Amidst Downward Momentum

ECB to hike by 75bp | Softer US Dollar (USD) Helps Gold And Crude Oil

Swissquote Bank Swissquote Bank 27.10.2022 13:51
Yesterday wasn’t not a good day for the US Big Tech. Google dived almost 10% after reporting disappointing results, while Microsoft sank almost 8%. Nasdaq bounced 2% lower after having tested the major 38.2% Fibonacci retracement, a touch below the 11700. Meta And don’t expect the things to look better today. Meta dived another 20% in the afterhours trading, after announcing disappointed results. Softer-than-expected  On the macro front, however, the Bank of Canada (BoC) surprised with a softer-than-expected rate hike, and US home sales fell almost 11% in September.   EUR/USD The US dollar index dived below its 50-DMA yesterday. The EURUSD rallied above parity, as Cable advanced past 1.16. Focun On Focus shifts to US GDP dat, the European Central Bank (ECB) decision, Apple & Amazon earnings today. Watch the full episode to find out more! 0:00 Intro 0:33 US Big Tech selloff intensifies. Meta down 20% post-market 1:55 What to expect from Apple & Amazon?7 4:05 Policy pivot? 5:20 US GDP to rebound despite sluggish economy 6:52 US dollar softer, EURUSD rallies above parity, Cable past 1.16 7:52 ECB to hike by 75bp, discuss QT 9:19 Gold, oil up on soft dollar Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #earnings #USD #GDP #ECB #rate #decision #EUR #XAU #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH      
ECB's Hawkish Hike: Boosting EUR/USD and Shaping Global Monetary Policy

The Main US Indices Fell | Asia-Pacific Stocks Are Mostly In The Red | Fortescue (FMG) Plans To Increase Iron Ore Production

Saxo Bank Saxo Bank 28.10.2022 08:38
Summary:  The ECB rose its key rate to 1.5% from 0.75% and signaled it is making progress in the fight against inflation. The US economy grew 2.6% on an annualized basis last quarter after two declines in a row, beating consensus as personal consumption rose more than forecast. The Nasdaq 100 & S&P 500 ended 1.6% and 0.6% lower, with Amazon falling 13% after hours, while the Dow Jones lifts, boosted by McDonald’s and Boeing. Crude oil climbs above $89, while iron ore falls to its lowest level since 2020. Asian equity futures mostly trade lower. Australia’s ASX200 opens 0.6% lower today, but tracks 2% higher this week, supported by commodity stocks and Macquarie beating forecasts. What’s happening in markets?     Need to know  The ECB rose its key rate to 1.5% from 0.75% and signaled it is making progress in the fight against inflation. Officials dropped a reference to hikes continuing for "several meetings," while saying they expect further action. Christine Lagarde emphasized that more increases were on the way: "We still have ground to cover." Money markets pared tightening wagers by as much as 20 bps, and European stocks erased losses. The US economy grew 2.6% on an annualized basis last quarter after two declines in a row, beating consensus as personal consumption rose more than forecast. The GDP report showed foreboding signs, as growth was almost entirely driven by trade, and residential housing investment plunged. As such, treasuries yields extended their fall, with 10-year yield pushing below 4%. The dollar was mostly higher, though the yen was barely up ahead of the BOJ meeting. Oil advanced and gold retreated. Asia-Pacific's equity futures are mostly in the red. The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) ended 1.6% and 0.6% lower, while the Dow Jones lifts, boosted by McDonald’s The US major indices fell on Thursday from continued weaker than expected earnings carnage with Facebook (META) falling 25%. In mega caps, Amazon (AMZN) was leading the losses, falling 4.1% on projecting slower growth and cutting its spending in the face of economic uncertainty, falling 13% after hours. Apple (AAPL) shares fell 3% on reporting weaker than expected iPhone and services sales in its latest quarter, however it gave an otherwise somewhat upbeat report, noting record sales spurred its active base of devices to hit an all-time high. Post market, Apple shares trade 0.4% higher. Meanwhile, the Dow Jones 30 blue-chip index ended 0.6% up on Thursday, supported by recession-stalwart McDonald’s (MCD) shares rising 3.3% on reporting sales that well surpassed analysts’ estimates, despite inflationary pressures. McDonald’s results were boosted by McRib sales, with the CEO saying they are “the GOAT of sandwiches on our menu,” using the acronym for greatest of all time. The fast-food chain will offer McRib nationwide in the US from the end of this month. Oct. 31. Boeing (BA) shares moved up 4.5% with the company releasing a bullish 20-year forecast for China’s commercial jet market, saying China will need to double its fleet in two decades and that China will be a major driver of Boeing sales. Boeing expects China to need 8,485 new passenger and freighter planes valued at $1.5 trillion through 2041.   Crude oil (CLX2 & LCOZ2) climbs above $89, while iron ore (SOCA) falls to its lowest level since 2020 Oil is trading higher for the third day, on tightness and heavy worry about the price of fuel products over the coming months as the northern hemisphere heads to winter. WTI climbed above $89 with US data showing an economic rebound last quarter. US natural gas futures steadied after the EIA reported stockpiles rose last week. European gas prices advanced. It’s also really important to note, tight diesel markets are taking the main stage at the moment, which you can read more on from our head of commodity strategy, just click here. As for other commodities, copper fell 0.7%, while iron ore (SCOA, SCOX2) fell 0.2% to $81.55, which is its lowest level since May 2020 on concerns that the iron ore market could be oversupplied. Yesterday Fortescue Metals (FMG) affirmed extra production will come to the market before March, (instead of June), with investors worried there is not enough demand from China. Most other commodities were lower, including Wheat and Corn while Cocoa rose 1.6%  Australia’s ASX200 (ASXSP200.1) falls 0.6% on Friday, but tracks 2% higher this week, supported by commodity stocks. Macquarie beats forecasts  After the Aussie share market rose for four straight sessions putting on 2.5% Monday to Thursday supported by commodity stocks, including lithium, gold stocks and agricultural stocks, today’s focus is on tech stock carnage, following the Wall Street sell off. Brainchip (BRN) is down 15%. While iron ore shares are lower, with Fortescue (FMG) trading 7% lower after noting that its increasing its spending, while its margins are tightening. Plus Fortescue is ramping up production, at a time when iron ore demand is limited. On the upside, Macquarie Group (MGQ) shares trade up 3.5% after reporting profit that beat forecasts with market volatility buoying its commodities and global markets business. Macquarie’s net income for the six months to Sept. 30 rose to A$2.31 billion ($1.49 billion), up from A$2.04 billion in the prior year. That exceeded the A$2.15 billion average estimate of four analysts surveyed by Bloomberg. Elsewhere, oil stocks are higher with the WTI price cleared $89, with Viva Energy (VEA) up the most in energy, up 1.6%. What to consider Markets, businesses, commodities with high exposure to China see heavy selling this week. Will it continue?   Assets with exposure to China are being heavily penalized as it seems investors are realigning their portfolios somewhat with the priorities of President Xi his policy on stronger state control over the economy and markets, which look set to continue unchallenged for years. The confirmation was made on Sunday and across the week, Hong Kong’s Heng Seng fell 7.5%, and the iron ore (SCOA, SCOX2) price fell to 15% $79.60 its lowest level since 2020 on concerns that the biggest iron ore consumer, China will further slow demand, all while iron ore seems oversupplied. The biggest pure play iron ore company in the southern hemisphere, Fortescue (FMG) shares fell almost 12% this week, as a result. Plus Fortescue company affirmed it is increasing its spending, while its margins are tightening. Fortescue plans to ramp up iron ore production at its expanded facility in March, instead of June, which will likely further push the iron ore market into greater oversupply. Australian exports trade prices stumble, imports prices rise   Australian exports prices fell last quarter, but less than expected, falling 3.6% vs the 7% fall consensus forecast. That said, export prices are still up 25.9% YoY. The quarterly drop in prices was driven by the fall in iron ore demand from China, and the drop in coal prices, as global steel demand weakens. That said, Australian gas and crude export prices rose amid surging global demand particularly from Europe. And lithium prices rose markedly, boosted by global electric vehicle sales. Inversely, Australian import prices rose more than expected, up 3%, vs the 0.9% consensus forecast. What contributed to this was price of imports of sodium hydroxide (used in bauxite refining) rose, while the price of importing plastics rose, coinciding with higher energy prices. All in all, import prices to Australia are up 19.3% YoY.    For a global look at markets – tune into our Podcast.     Source: https://www.home.saxo/content/articles/equities/market-insights-today-28-oct-28102022
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Recent Decisions On Interest Rates (ECB,BoJ) | Big Oil Earnings

Swissquote Bank Swissquote Bank 28.10.2022 12:32
An ugly week of Big Tech earnings is coming to an end, having wipe out hopes of seeing earnings boost gains across the stock markets. Yesterday, Meta plunged more than 24%; Nasdaq 100 lost almost 2%. And today won’t be any better, as Apple and Amazon also lost in the afterhours trading. Amazon lost up to 20%! US Big Tech US Big Tech rather killed joy this week, so all eyes are on Big Oil to reverse mood. Exxon Mobil and Chevron will be reporting earnings this Friday and are expected to announce stunning earnings. US GDP data On the data front, investors didn’t know what to do with the mixed US GDP data yesterday. The latest GDP update showed that the US economy grew 2.6% in the Q3, exports boosted the headline figure, while imports fell - meaning that the domestic demand from the US weakened despite a significant appreciation of the US dollar. The central banks On the central banks front, the European Central Bank (ECB) hiked the interest rates by 75bp at yesterday’s meeting, as the stubborn Bank of Japan (BoJ) maintained its interest rate unchanged at -0.10% at today’s meeting, while revising the 2022 inflation forecast significantly higher from 2.3% to 2.9%. What ahead Today, investors will be watching one last thing on the macro front before the weekly closing bell – and that’s the September PCE index, along with the personal income and spending data. Any weakness could further weigh on the dollar before we close the week, and before next week’s FOMC meeting. Watch the full episode to find out more! 0:00 Intro 0:41 Big Tech selloff continues as Amazon & Apple fail to convince 2:23 Watch Big Oil earnings: Exxon & Chevron are due to report today. 4:17 US GDP data was mixed! 6:16 ECB hiked 75bp, but euro slipped 7:46 BoJ stood pat, while revising inflation forecast! 8:35 Watch US PCE index, personal income & spending Ipek Ozkardeskaya  Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Apple #Amazon #Meta #Google #Microsoft #ExxonMobil #Chevron #earnings #USD #GDP #ECB #BoJ #rate #decision #EUR #JPY #crudeoil #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Oanda Podcast: US Jobs Report, SVB Financial Fallout And More

In USA Higher Interest Rates Exacerbate The Problem Of Public Debt

InstaForex Analysis InstaForex Analysis 28.10.2022 14:02
Today the BLS (Bureau of Labor Statistics) will publish the latest inflation report in relation to the PCE index for September 2022. This will be the most recent inflation data the Federal Reserve will receive and will therefore be a key component in deciding the size of the next rate hike at the Federal Open Market Committee meeting next week. According to the CME FedWatch tool, there is an 88% chance that the Fed will raise rates by 75 basis points, down from yesterday's forecast of 92.5%. This will raise the Fed's base rate between 375 and 400 basis points at the FOMC meeting next week. According to Bloomberg News, economists polled predict that, compared with last year, the PCE index will rise by 6.3% in September. "Excluding food and energy, the figure is expected to rise by 0.5% compared to August and by 5.2% from September 2021. The higher forecasts follow government data released earlier this month, which show that a key indicator of core consumer prices accelerated to a 40-year high in September. In an article written by Jessica Menton of Bloomberg News, the biggest question facing investors and traders is: "Is multi-year inflation nearing a peak, or will prices continue to rise... Traders are keeping a close eye on the Federal Reserve's preferred inflation rate. The PPI will help determine if there will be another 75 basis point interest rate hike by the central bank at its meeting next week." Although her article focused on Wall Street and stock investors, her statements give a clear picture of other asset classes, including gold and silver. Thomas Martin, senior portfolio manager at Globalt Investments, said: "The Fed is laying the groundwork to end excessive rate hikes if inflation data supports it. But if this does not happen, they will be ready to continue their big campaigns after November. Unlike previous trading days, yesterday's dollar strength was negatively correlated with gold prices. The dollar rose 0.79%, with the dollar index currently at 110.87. This means that the partial decline in the price of gold would have been much larger had the dollar not added about 8/10 percent of its value. Market participants are also considering how the Fed will take into account yesterday's government report, which showed third-quarter GDP rose 2.6% from an estimate of 2.3%, expanding faster than expected. It is also clear from the report that this year the US economy experienced a period of positive growth for the first time. This led to a decline in gold prices after the release of yesterday's GDP report. The third-quarter GDP report included the most recent data on annual federal interest payments, indicating they had increased to $736.5 billion. This set a new record for annual interest payments on US government debt. According to US Debt Clock.org, the US national debt is currently over $31 trillion and is unsustainable. The higher interest rates set by the Fed only exacerbate this problem. However, the current level of government debt and the high cost of servicing only interest rates are creating extremely optimistic market sentiment for gold.   Relevance up to 10:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325634
German labour market starts the year off strongly

The Peak Of German Inflation Will Probably Come At The Turn Of The Year

ING Economics ING Economics 28.10.2022 14:57
German inflation increased once again in October. We are still a few months away from the peak  The German inflation shocker has entered the next round as headline inflation just came in at 10.4% year-on-year in October, from 10.0% YoY in September. The HICP measure increased to 11.6% YoY, from 10.9% YoY in September. The fact that monthly inflation (0.9% month-on-month) is still far above the historical average for October illustrates how inflation is spreading across the German economy. Peak not reached, yet The available regional data suggest that the increase in headline inflation was not only driven by higher food, energy and commodity prices. Inflationary pressure is actually spreading across the entire economy with prices for clothing and other apparel, and leisure and packaged holidays further increasing. Looking ahead, the peak of German inflation will probably come at the turn of the year but it will take until next spring before inflation drops into single-digit territory again. The recent drop in wholesale gas prices will hardly affect the short-term inflation outlook and may only bring relief later in 2023. Today’s German inflation data once again underlines that no central bank in the world can bring down actual inflation. This is why the ECB’s own narrative will increasingly shift toward inflation expectations and longer-term inflation outlooks. With this in mind, after yesterday’s jumbo rate hike, the December meeting could indeed deliver a dovish pivot. ECB president Christine Lagarde was more vocal than ever regarding a looming recession yesterday and the ECB’s staff projections in December will very likely show inflation structurally coming down to 2% during 2024 and 2025. Enough to stop the rate hiking cycle at the latest in February and shift from rate hikes to gradual quantitative tightening at the start of the second quarter of 2023. TagsMonetary policy Inflation Germany Eurozone ECB   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
ECB press conference brings more fog than clarity

Eurozone Interest Rate Decisions Will Continue To Be Data Driven -28.10.22

InstaForex Analysis InstaForex Analysis 29.10.2022 09:10
The downside risks of the European economy are growing, but with inflation rising to almost 10% in September, the European Central Bank continued to raise interest rates. After raising interest rates by 75 basis points across the board, ECB President Christine Lagarde said the committee had tightened financial conditions and more work needed to be done. "There is still a field to cover," she said. "In the current state of uncertainty, with the possibility of a recession rising, everyone has to do their job," Lagarde said. "Our job is price stability. This is our main task." Interest rates are expected to rise by early 2023. But Lagarde didn't say how high the stakes would be. Reiterating that future policy rate decisions will continue to be data-driven and meeting-by-meeting. The increase in interest rates is due to the fact that the ECB continues to see further risks to economic activity until the end of the year. "Eurozone economic activity is likely to slow significantly in the third quarter of the year, and we expect further weakening for the remainder of this year and early next year. High inflation continues to hold back spending and production. Serious disruptions to gas supplies have further worsened the situation, and both consumer and business confidence has fallen rapidly, which is also putting pressure on the economy," Lagarde said in her opening remarks. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. While soaring energy and food prices are the two biggest drivers of inflation, the ECB is forecasting a general rise in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. "Incoming data confirms that the risks to the economic growth outlook are clearly abating, especially in the near term," she added. However, price stability and bringing inflation down to the ECB's medium-term target of 2% is the central bank's priority. Although the sharp rise in energy and food prices is the most significant driver of inflation, the ECB predicts a widespread increase in consumer prices. "Inflation remains too high and will remain above our target for an extended period," Lagarde said. - The risks for the inflation forecast are primarily positive. The main risk for the nearest period of time is a further increase in retail prices and energy prices. In the medium term, if energy and food prices rise, inflation may be higher than expected."     Relevance up to 12:00 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325638
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Forecasts Of The Situation In The Eurozone Are Not Very Good

Kamila Szypuła Kamila Szypuła 30.10.2022 10:48
At the beginning of the week, the European Union will share the most important indicators. Europe faces a difficult and uncertain geopolitical and economic outlook. Inflation remains too high for a long time. Actions in the field of montage policy do not bring the expected results. However, the fight against inflation is expected to be painful. High interest rates can reduce demand, investment and employment, causing the economy to slow. The ECB seems determined to overcome these fears and fulfill the bank's main mandate of price stabilization, a goal that has turned into a difficult struggle in the Ukrainian war and the energy crisis. Core CPI The change in the price of goods and services purchased by consumers, excluding food, energy, alcohol, and tobacco is expected to reach level of 4.8%. The fight against inflation continues. And the situation of the eurozone does not seem to be getting better. The geopolitical situation, which is the war in Ukraine, which directly affects the member states, still threatens the economic situation. The base CPI indicator also shows this significantly as it has been growing significantly since May. The expected level of 4.8% is the result of the previous reading, so we can believe that the actions of the European central bank may have eased the situation. CPI Although the core CPI remains below 5%, the Eurozone Consumer Price Index is expected to rise to 10.2%. The Baltic countries continue to be the hardest hit; Estonia in particular is experiencing the highest levels of inflation in the eurozone. Such a high level is significantly influenced by the situation of energy prices. It is obvious that as a result of the war in Ukraine difficulties have arisen in Euroland with energy. There is no sign of an improvement in the energy crisis, as Russia said in September that it would not fully resume gas supplies to Europe until the West lifts sanctions imposed on Moscow over its invasion of Ukraine.The central banks of the member states are doing what they can to fight inflation. The ECB has the greatest impact on the fight against inflation. The ECB tries to bring the inflation level back to stabilization. Following in the footsteps of its counterparts elsewhere in the world, in July, the European Central Bank raised interest rates by more than expected amounts for the first time in 11 years as it pursues persistently high inflation. Everything is going up: electricity, diesel, vegetables, the Internet, hotels, flights, and now interest rates as well. The only question is whether such a state of affairs leads to a recession in the euro area. Source: investing.com GDP The surprisingly positive forecast is for gross domestic product, which is expected to reach 1.0%. Despite the positive data, it should be expected that the worst is still to come. Some economists are of the opinion that a recession is already in Europe. Recession in the eurozone now appears likely as a result of the deepening gas crisis. Economic activity in the euro area declined even more in October, and Germany, the EU's largest economy, appears to be headed towards a recession. Higher interest rates tend to mean a decline in economic activity as credit becomes more expensive and consumer spending decreases. Source: investing.com
The Markets Still Hope That The Fed May Consider Softer Decision

The Markets Still Hope That The Fed May Consider Softer Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 09:52
The coming week will be unusually rich in economic statistics and various events that will have a significant impact on the markets. A number of important economic data will be released this week, where the values of production indicators both in Europe, China and the USA will play a significant role. The numbers of indexes of business activity in the manufacturing sectors will have to indicate what impact the processes of raising interest rates have on national economies, of course, here we mean the countries of the so-called West. The decline in indicators will demonstrate a steady trend towards recession in the Western countries with the expected result - continued increase in interest rates by central banks and, as a result, continued pressure on demand in the stock markets and the dollar. Also, new data on consumer inflation in the euro area will be published today, which, as predicted, will again show its increase in annual terms from 9.9% to 10.2%. If the reports do not disappoint, then the growth of inflation in the euro area will again bring to life the topic of further continuation of the aggressive increase in European Central Bank interest rates, however, which we strongly doubt, since there are noticeable discrepancies between the words of the central bank's representatives and real actions. This allows us to believe that the euro is unlikely to receive significant support in the near future. Monetary policy meetings of the Reserve Bank of Australia and the Bank of England will be held this week. Interest rates are expected to rise by 0.25% in Australia and by 0.75% in Britain, which, in our opinion, is unlikely to noticeably change the positioning of the Australian dollar and sterling against the US currency if the Federal Reserve, following the meeting on Tuesday, makes it clear that the growth rate rates at 0.75% can be maintained until the start of the new year. Only a softening of the US central bank's position regarding the prospective aggressive continuation of raising rates can significantly change the situation on the markets and lead to a global reversal in the stock markets and a weakening of the dollar. And the icing on the cake will be the release on Wednesday and Friday of new data from the US labor market. If they show the preservation of a high rate of creation of new jobs, this may allow the Fed to continue actively raising rates, which will become a new basis for the dollar's growth. What can we expect in the markets today? We believe that trading in Europe, according to the dynamics of futures for stock indices, will start in the red, but a lot will depend on the positioning of American investors. If trading in the United States starts positive, this may put pressure on the dollar and support its local weakening, as the markets still hope that the Fed at the November meeting may consider reducing the rate growth rate in the near future. Forecast of the day: EURUSD The pair is trading in a very tight range of 0.9925-0.9970. If the eurozone inflation report turns out to be lower than expected or in line with the forecast, the pair may break out of this range and fall to 0.9820, at the same time, if inflation shows more growth, this will cause an expectation of a continuation of the ECB's aggressive rate hike and may cause the pair to rise to 1.0080. EURJPY The pair is moving in the range of 14550-147.65. A strong increase in inflation in the euro area may trigger the likelihood of continued aggressive rate hikes by the ECB, which will support the euro against the yen. In this case, a rise above 147.65 could lead to a rise of the pair to 148.65.       Relevance up to 08:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325759
Hang Seng Index Plummets -2% Amid Weak China Data, Short-Term Trend Intact

Major Currency Pairs (EUR/USD And GBP/USD) Are Now Subject To A Future Fed Decision

InstaForex Analysis InstaForex Analysis 31.10.2022 11:02
According to a preliminary estimate released by the Bureau of Economic Analysis, U.S. real GDP increased at an annualized rate of 2.6 percent in the third quarter of 2022, well above expectations. The main contribution to GDP growth was from data on foreign trade, other indicators turned out to be noticeably less positive. Take note that the US stock indexes were impressed by the strong reporting of companies, the S&P 500 index rose 2.5%, exceeding the cumulative fall of 1.35% over the previous two days, ending the week up 3.95%, which was the second consecutive weekly gain. In general, the US economy looks quite confident, which gives reason to expect that the Federal Reserve will not give clear signals about the slowdown in tightening, and the dollar may well win back the positive data, continuing to strengthen. In any case, the probability of a rate hike by the same 0.7% in December remains high. European stock indices showed mixed dynamics, high inflation and the threat of an energy crisis are still the main negative factors for the euro, which will prevent it from resuming growth. EURUSD As expected, the European Central bank raised interest rates by 0.75%, but did not give any signal that the pace of rate hikes will continue to be high. Most likely, the ECB is inclined to slow down the pace of rate hikes, as it noted "substantial progress" in the revision of monetary policy, plans for quantitative tightening will be determined at the December meeting, which came as a surprise to markets that were waiting for specifics. The insufficiently hawkish stance of the ECB provoked a decline in global bond yields, European ones suffered the most, and amid accelerating inflation. Germany's overall consumer price index reached an annualized rate of 11.6% in October, well above the 10.9% expected by economists, while Italy (11.9% vs. 9.5% experience) and France (7.1 % vs 6.5% experience) also exceeded expectations. The net long position on the euro increased during the reporting week by 3.4 billion to 9.3 billion, this is a very strong growth, indicating an increase in the positive relative to the euro. However, despite such a strong change, the settlement price turned down, the reason being that even the apparently hawkish decision of the ECB did not lead to an increase in European bond yields, and the yield differential between European and US bonds did not decrease, but even slightly increased. This discrepancy between the long-term positioning in the futures and options market, which is reflected in the CFTC report, and current yields does not yet allow us to break the trend towards the weakening of the euro. EURUSD, as we suggested a week earlier, made a successful attempt to corrective growth, it passed the resistance of 0.9920/40, however, short positions resumed in the area above parity. We assume that the euro will be under slight pressure ahead of the Federal Reserve meeting, growth above the local high of 1.0092 is unlikely, trading will go in a sideways range with a downward trend. The main target is the support zone of 0.9820/40. This scenario can be canceled if the Fed shows more pronounced weakness on Wednesday than the markets have been laying down so far. GBPUSD The Bank of England will hold a regular meeting on Thursday, and the rate is expected to rise by 0.75%. The government change has calmed the markets, yields have pulled back, and now the focus will be on inflation forecasts, as they directly affect the position of the BoE. The net short position on the pound slightly decreased during the reporting week by 0.2 billion to -3.4 billion, positioning, unlike the euro, remains confidently bearish. The yield differential widened sharply in favor of the dollar, resulting in a rapid decline in the settlement price. The pound on the wave of rumors about the easing of the Fed's position still went higher than we expected, and reached the upper limit of the long-term bearish channel. We assume that a high will be formed here, an attempt to test the strength of the local high of 1.1735 is not ruled out, but a downward reversal from current levels is much more likely. Technical support at 1.1336 and 1.1147 can also act as immediate targets. High volatility is unlikely before the announcement of the results of the Fed meeting.   Relevance up to 09:00 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/325776
US Inflation Forecasted at 3.3%, UK GDP Projections at 0%, Fed Member Harker's Views on Rates

Inflation In Eurozone Higher Than Forecast | Retail Sales Reports

Kamila Szypuła Kamila Szypuła 31.10.2022 11:15
We start the beginning of the new week with data on inflation in the European Union. Apart from important data from Strego Kontunet, the market does not expect important data from America. Japan Industrial Production In Japan, despite the positive results in August, Industrial Production fell below zero to -1.6%. The decline was expected but not that low. The result was forecast at -1.0%. Such a situation means weakening demand in this sector. For investors, this means a significant slowdown and is not beneficial for the image of the Japanese currency or its entire economy. Japan Retail Sales Another important report for the Japanese economy is the report on retail sales. The result turned out to be positive. The 4.1% level was expected to hold this time as well, but the reading was higher. The current level of retail sales in Japan is 4.5%. Since the fall in July, sales in Japan started a new pattern trend, which, as we can observe, continues. Retail sales are seen as a stand-in for consumer spending and its growth can be considered positive for the development of the Japanese economy. Source: investing.com Austrailan Retail Sales Australia also shared the results on retail sales. The result was neither positive nor negative. The positive fact is that it has met expectations and has not fallen. This is the third reading in a row when the retail sales level is 0.6%. According to this indicator, the Australian economy is stagnating. China Manufacturing PMI The China Manufacturing Purchasing Managers Index fell below 50 again. The current reading shows that the index reached the level of 49.2 against the previous one (50.1), it is a negative reading. Also, this reading did not meet the forecast level (50.0) The China Non-Manufacturing Purchasing Managers Index (PMI) also fell. The spatula trend continues. The gauge has dropped from level 50.6 to level 48.7. The current value and movements of the PMI and its components can provide useful information for business decision makers, market analysts and investors .We can expect that poor performance in both sectors will have negative effects on market decisions. Important economic data from Europe The core CPI reached the level of 5.0% against the forecasted 4.8%. On the other hand, the overall CPI reached the level of 10.7% and was higher by 0.5% than forecasted. As we can see, the situation in the euro zone has not changed despite the actions of the ECB. Read more: Forecasts Of The Situation In The Eurozone Are Not Very Good| FXMAG.COM ECB’s member is set to speak After today's important economic data from the Eurozone, a speech by Philip R. Lane, member of the Executive Board of the European Central Bank will take place at 16:00 CET. The speech that will take place after important reports will be helpful for investors in taking further decisions and thus contain indications on the future possible direction of monetary policy. Summary Despite the fact that only the European Union released data important for the markets, during the week there will be more reports that will have a significant impact on the market situation. This week we should focus on next decisions of central banks regarding interest rates (Fed, RBA, Bank Of England). 0:50 CET Japan Industrial Production (MoM) (Sep) 0:50 CET Japan Retail Sales (YoY) (Sep) 1:30 CET Austrailan Retail Sales (MoM) (Sep) 2:30 CET China Manufacturing PMI (Oct) 11:00 CET EU CPI 11:00 CET EU GDP 11:00 CET EU Core CPI 12:25 CET BCB Focus Market Readout 16:00 CET ECB's Lane Speaks Source: https://www.investing.com/economic-calendar/
Indonesia's Inflation Slips, Central Bank Maintains Rates Amidst Stability

The Currency Markets This Week Will Be Dominated By Fed Decisions

ING Economics ING Economics 31.10.2022 11:58
It is a busy week for FX markets, with key policy rate meetings on both sides of the Atlantic and some tier-one data releases. The question to be answered this week: is the Federal Reserve ready to pivot? We would argue that the Fed has less cause than many to pivot. And weak growth overseas should mean that it is too early to unwind long dollar positions In this article USD: Wednesday's FOMC will dominate EUR: Markets still price a 75bp ECB hike in December GBP: Thursday's BoE could do some damage CEE: Tough times are back USD: Wednesday's FOMC will dominate FX markets this week will be dominated by Wednesday's FOMC meeting and whether the Fed provides any oxygen to the idea of a pivot - or a shift to a slower pace of tightening. As we discuss in our FOMC preview, the Fed faces several challenges here, but we suspect the bar is quite high for a pivot and we feel it is too early to call time on the dollar's rally. After all, the market in effect already prices the pivot (pricing a 75bp hike this week and a 50bp hike in December) and we suspect the chances of another 75bp hike in December are under-priced. In addition, this week sees a whole raft of US data culminating in Friday's nonfarm employment data. We forecast 220k in job gains and an unemployment rate of 3.6% - still below the 3.8% the Fed forecast for year-end. Recall that even with the unemployment rate rising to 3.8%, the Fed's dot plots had assumed that a policy rate in the 4.25-4.50% area would be appropriate for the end of this year. As always there are two sides to the dollar story - what's going on at home and what's going on abroad. High beta currencies like the Norwegian krone, New Zealand dollar and British pound have been some of the best performers against the dollar over the last month. That has largely been due to the turnaround in sterling. But as my colleague James Smith discusses in his Bank of England (BoE) preview, the BoE may well disappoint with just a 50bp hike.  A weaker tone in sterling could undermine the recent renaissance in European currencies and push more wind back into the dollar's sails. At the same time, Chinese data continues to disappoint, with the October composite PMI dropping back into contraction territory for the first time since May. In short, it looks as though the dollar's month-long, 4.5% correction could have ended last Thursday and events this week could prove a catalyst to send the dollar back towards the highs. Our base case does see the dollar retesting the highs later this year. A break of 111.00/10 in DXY today could open up a move to the 111.80 area. Chris Turner EUR: Markets still price a 75bp ECB hike in December The eurozone continues to battle with inflation and today should see the release of a new cycle high in CPI at 10.3% year-on-year - and potentially even higher given the German CPI release. Today we will also get a first look at 3Q22 eurozone GDP, expected at 0.1% quarter-on-quarter. The news may temporarily push eurozone rates higher, even though a 75bp hike is virtually priced for the 15 December ECB meeting. Ultimately, however, our macro team believes the ECB will only hike 50bp in December and that the terminal rate for this cycle proves to be in the 2.25% area rather than the 2.80% currently priced by the markets. And bluntly, the ECB has far more cause than the Fed to pivot. With global growth under pressure from tighter rates and a misfiring Chinese economy, we think the eurozone and the euro will continue to struggle. That is why last Thursday's high of 1.0089 in EUR/USD could have been significant. A close back under the 0.9900/9910 area this week would support our preferred view of EUR/USD retesting the lows near 0.95. Chris Turner GBP: Thursday's BoE could do some damage GBP/USD is consolidating above the important 1.1500 level, holding onto recent gains. The highlight this week will be Thursday's Bank of England meeting. The market firmly prices 75bp, but we think the risk of a softer 50bp is under-priced as the BoE prepares for the coming recession. As we have argued previously - now that a lot of the fiscal risk premium has come out of sterling - the forthcoming tighter fiscal and more dovish than expected monetary policy could prove a bearish combination for sterling. We are dollar bulls and would thus favour GBP/USD breaking back under 1.1500 based on this week's confluence of events. This would also point to current EUR/GBP losses under 0.8600 proving short-lived. Chris Turner CEE: Tough times are back This week we have a busy calendar not only at the global level but also in Central and Eastern Europe. Today we start with Polish inflation, which will be crucial for next week's National Bank of Poland meeting. We expect a jump from 17.2% to 18.1% year-on-year, slightly above market expectations, mainly due to higher fuel, energy and food prices. Tomorrow in the Czech Republic, 3Q GDP data, October PMI and the state budget result will be released. The first GDP result in the region should show a contraction in the economy and confirm the start of a shallow recession. On Wednesday, we will see October PMIs in Poland and Hungary, which will confirm the downward trend in industrial sentiment. On Thursday, the highlight of this week is the Czech National Bank meeting. In line with the market, we expect interest rates to remain unchanged. A new forecast will be presented which will show lower inflation but higher wage growth, which together with the cost of FX intervention is the main risk for us in terms of a possible additional interest rate hike at the coming meetings. However, we consider the CNB hiking cycle to be finished. The FX market in the region will be dominated by global events in the coming days. Already last week, the positive trend in CEE was halted by the ECB meeting. This week will see a series of central bank meetings led by the Fed. Therefore, we see both support from high-interest rate differentials in the region and EUR/USD as being at risk. In addition, gas prices have been rising again in the last two days and many of the reasons for the strengthening trend in the CEE region over the past two weeks are now dissipating. Of course, at the local level, we will be watching the inflation numbers in Poland and the CNB meeting in particular but this week speaks strongly against CEE FX.  We see the Czech koruna as the most vulnerable at the moment, which will again be the focus of short positioning ahead of the central bank meeting. We will likely see a move towards the 24.60-24.70 EUR/CZK levels. The Hungarian forint is likely to look above 415 EUR/HUF again. On the other hand, the Polish zloty should be best positioned this week, supported by a high inflation number and an increase in NBP rate hike bets. Frantisek Taborsky Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Positive Start Expected as Nvidia's Strong Performance Boosts Market Confidence

Dow Jones Saw The Biggest Profits And The German DAX Index Rebound From Declines

Conotoxia Comments Conotoxia Comments 31.10.2022 12:13
October 2022 seems to have brought respite to many asset classes. During this time, the stock, bond or cryptocurrency markets tried to pick up, while the US dollar seemed to lose value at the same time, along with the falling VIX "fear index" contract. Performance of key indices and companies In October,one of the popular futures contracts, the contract for the U.S. Dow Jones Industrial Average index saw the biggest gains. It rose by almost 13 percent during this period. Although the month is not yet over, for the moment, only Verizon ranks in the entire index since the beginning of October with a negative result. On a monthly basis, the decline is 0.92 percent. In contrast, the biggest increase in the index was achieved by Caterpillar (up more than 30 percent). The company reported that sales and revenues in the third quarter of 2022 recorded an annual increase of 21 percent, reaching $15 billion. The company's profit was $2.04 billion, an increase of 43.13 percent compared to the same quarter of the previous year, BBN reported. Operating profit rose 45.73 percent year-on-year to $2.42 billion. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel engines, industrial gas turbines and diesel-electric locomotives. Source: Conotoxia MT5, Caterpillar, Monthly DAX also with growth in October The second popular instrument, which seemed to rebound from earlier declines, was the contract for the German DAX index. Although emerging macroeconomic forecasts for the German economy appear to be worsening, and the European Central Bank raised interest rates, the DAX rose nearly 10 percent. The company that may have gained the most was Deutsche Bank, as the month's performance was up more than 30 percent by now. The German bank reported its best results since 2016 in October. Net income for the third quarter of 2022 was €6.9 billion, up 15 percent year-on-year and the highest third-quarter income since 2016. The dollar exchange rate fell nearly 1 percent. Market hopes that the U.S. Fed will slow down interest rate hikes at the end of the year and in the first quarter of 2023 may have led the U.S. dollar to fall in October. At the moment, the USD index is trading 0.9 percent lower than at the beginning of the month at 111 points. The EUR/USD exchange rate is near parity at 1.0000, all likely in anticipation of the Fed's November 2 interest rate decision. The market seems to be expecting a 75bp hike to 3.75-4.00 percent, while the end of the hike cycle could be priced in at 4.75-5.00 percent in early 2023. October's biggest declines? It seems that among the popular contracts, the biggest drop in October may be the VIX, which fell 15 percent to 26.86 points this morning. Looking at the chart of the contract showing expected volatility on the S&P500 index, someone could  see that this month's trading may have turned around at a potential resistance level. Source: Conotoxia MT5, VIX, Weekly Will volatility continue at lower levels in November? Here, a lot may depend on the US central bank and events in Eastern Europe. Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service) Read more reviews and open a demo account at invest.conotoxia.com Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75,21% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
The US Dollar Index Is Expected A Pullback Rally At Least In The Near Term

The US Dollar Started The Week Stronger | Expectations For The RBA's Decisions

Saxo Bank Saxo Bank 01.11.2022 08:44
Summary:  A return to hawkish expectations for the FOMC and risk-off from weak China data as well as possible issues in Russia-Ukraine grain deal saw markets tumble on Monday and US 10-year yields reversed back to 4.10%. Dollar strength returned as well, with gains most pronounced against the sterling and yuan. However, demand concerns returned, while oil also retreated with President Biden’s hopes of a windfall tax on profits of US energy companies weighing as well. Gold extended its downtrend with the surge in yields. Reserve Bank of Australia on watch in the day ahead, with some key Japanese names like Toyota and Sony also reporting earnings. What is happening in markets? The Nasdaq 100 (USNAS100.I) & S&P 500 (US500.I) fall on Monday ahead of Fed, but hold onto monthly gains US stocks fell into the red on their last trading day of the month with end of month rebalancing coming into play, while stocks were also on the back foot as bond yield climbed ahead of Wednesday's Fed decision. Still the S&P500 held onto a monthly gain of 8%, but on Monday the index dropped 0.75%. The Nasdaq fell 1%, but held a 4% October gain. Most Treasury yields rose, with 10-year notes up to around 4.05%, while the dollar climbed against every G-10 partner, save the kiwi. Oil and gold both retreated. Energy shares whipsawed on news that President Joe Biden will call on Congress to consider tax penalties for oil producers accruing record profits. JPMorgan Chase Marko Kolanovic is joining strategists who believe the aggressive Fed hiking is nearing an end. He thinks the Fed will raise rates by 50 basis points in December and pause after one more 25-basis-point hike in the first quarter. Apple (AAPL) shares fell 1.5% with iPhone’s Foxconn plant in central China grappling with virus outbreak.  Fertilizer giant, Archer Daniels (ADM) rose 2.2% with traders expecting higher agricultural prices amid supply concerns from added geopolitical tension. Australia’s ASX200 (ASXSP200.1) futures suggest a 0.15% rise on Tuesday, ahead of the RBA rising rates today The Reserve Bank of Australia is expected to deliver its 2nd straight month of 0.25% hikes at today’s meeting, according to Bloomberg consensus, which will take the cash rate from 2.6% to 2.85%. However it will be a tough decision, with stronger-than-expected third-quarter inflation data from last week, and hot retail and credit data yesterday giving room for a potential 50-bp (0.5%) hike. This could trigger a knee jerk jump in the Aussie dollar vs the US (AUDUSD), however we maintain our bearish view of the AUDUSD given the Fed has more ammo to aggressively rise. Also note, Governor Philip Lowe has regularly wrong-footed forecasts. Still, swaps imply only a 20% chance of an outsized move, and Australian 10-year yields are a full 25 bps below similar-dated Treasuries, meaning there are expectations that RBA will take a softer line than the Fed. The RBA will last month previously noting loan arrears and insolvencies have picked up in Australia, while housing loan commitments declined -  ‘demonstrating the effect of high interest rates on housing’. This demonstrates, the RBA has a tough task of rising rates to slow inflation, without compromising the health of the economy. FX: Dollar returns to gains ahead of FOMC Dollar started the week on a firmer note as WSJ Timiraos comments turned more hawkish over the weekend after dovish Fed expectations possibly went a bit far. The worst performer was GBP, and we had raised concerns yesterday that it was pricing in all the good news so there was scope for disappointment. GBPUSD broke below 1.1500 with EURGBP also reversing back higher to 0.8620 despite EURUSD weakness to sub-0.99. USDJPY rose back above 148.50, with US 10-year Treasury yields touching 4.1% at one point. Japan’s Finance Ministry data showed a record USD 42.8bln was spent on multiple interventions in the FX market last month to attempt to cushion the Yen’s fall. The Chinese yuan continued to slide, USDCNH rose to 7.34 and the onshore spot USDCNY seen close to 15-year highs of 7.30+ at Monday’s close. Crude oil (CLX2 & LCOZ2) worried about oil demand Crude oil prices were lower on Monday as concerns of weaker demand weighed on sentiment with the Fed commentary from whisperer Nick Timiraos shifting towards a hawkish stance again. Meanwhile, China’s PMIs fell below the 50 mark which separates expansion and contraction. On the other hand, OPEC’s World Oil Outlook estimates demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade and secretary-general Haitham al Ghais said that the oil supply surplus was the main reason for the decision to cut output. There were also some reports suggesting that President Biden is considering a potential windfall tax on US energy companies. WTI futures slid towards $86/barrel. Gold (XAUUSD) in a downtrend Gold (XAUUSD) fell for a third consecutive day approaching the recent support area $1,625 as US dollar broadly strengthened with 10 year treasury yield touching 4.10% at one point on Monday. With the Fed poised for another 75bps rate hike this week, pressure on gold could increase, but we continue to see fundamental strength in gold especially given the higher-for-longer inflation expectation. But as a minimum gold needs to break above $1730 before an end to the month-long downtrend can be called.   What to consider? What next for the RBA after peak hawkishness? The Reserve Bank of Australia meets today and is expected to continue with a smaller pace of rate hikes with 25bps priced in despite a hotter than expected Q3 CPI. Q3 CPI rose by 7.3% YoY from previous print of 6.1%, coming in higher than expectations. RBA’s preferred Trimmed Mean CPI was seen at 6.1% vs. expected 5.6% (prev. 4.9%), while PPI also accelerated in Q3 to 6.4% from 5.6% previously. There are, therefore, some calls for an outsized 50bps rate hike as well as inflation continues to inch above the central bank’s 2-3% target range. An update on the latest growth and inflation projections will also be seen along with today’s rate decision. AUDUSD will need a clearly larger than expected rate hike of 50bps, or a very hawkish commentary with a 25bps rate hike to make any substantial gains. If RBA tows the line, focus shifts to USD and the Fed meeting on Wednesday. AUDNZD is also key to watch, with the 1.1000 handle on test. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild whether and full storage hasn’t unleashed the full effects of energy shortages this year, the threat continues to loom and this could mean the macro story could deteriorate further. China PMIs and Hong Kong GDP growth send red flags China’s manufacturing and non-manufacturing PMI both plunged into contractionary territory in October with Covid curbs likely continuing to weigh on demand and manufacturing ahead of the CCP meeting. China's official manufacturing PMI declined to 49.2 in October after a brief rebound to 50.1 in September following a two-month decline. Meanwhile, services activity fell to 48.7 in October from 50.6 last month. Also, Hong Kong recorded its worst quarter in over two years, with Q3 GDP growth coming in at -4.5% YoY vs. expectations of -0.8%. The QoQ growth was also in negative territory at -2.6%, signalling recession concerns if such a performance continues despite the economy’s reopening. Key Japanese earnings on watch Big Japanese names Toyota (7203) and Sony (6758) report earnings today. While high inflation and interest rates remain a key consideration to watch for consumer spending trends, the effect of a weak yen will also be key to consider. Sony will be key to watch after the US tech tumble last week, and consensus is looking for a 10% drop in its operating profit from a year ago. Toyoto will likely continue to highlight the supply chain pressures, but possible buyback announcements could support.   For a global look at markets – tune into our Podcast.   Source: https://www.home.saxo/content/articles/equities/market-insights-today-1-nov-01112022
Rates and Cycles: Central Banks' Strategies in Focus Amid Steepening Impulses

US 10-Y Treasury Yields Have Eased Back | Airbnb Expects Revenues To Increase

Saxo Bank Saxo Bank 01.11.2022 09:42
Summary:  Risk sentiment remains near the local highs heading into tomorrow’s FOMC meeting, where the market is hoping for guidance that suggests a downshift in the pace of tightening. Another micro-hike of 25 basis points from the RBA increases the sense that more central banks are set to slow their fight on inflation via rate hikes. Elsewhere, unconfirmed stories swirling overnight in China that that Covid restrictions are set to be lifted saw a potent rally in Chinese equities.   What is our trading focus? Nasdaq 100 (USNAS100.I) and S&P 500 (US500.I) Momentum is trying to come back into US equities after yesterday’s retreat with S&P 500 futures trading around the 3,902 level. A higher close today could set in motion an extended rally into tomorrow’s FOMC rate decision lifting expectations for the Fed to signal a slowdown in rate increases. Given the latest macro figures we have gotten this might still be too early for the market to expect this, but if the Fed confirms the ‘peak hawkishness’ narrative then the 4,000 level in the S&P 500 futures is not outrageous. Euro STOXX 50 (EU50.I) Strong earnings from BP lifting sentiment in early trading in addition to positive spillover effects from the Chinese equity session seeing Hang Seng futures 6.1% higher on unconfirmed news that Chinese policymakers are considering phasing out its strict Covid policy. STOXX 50 futures are pushing higher this morning trading around the 3,649 level, which is the highest level since 13 September. The market is increasingly adjusting to the ‘peak hawkishness’ theme and if momentum extends here the 200-day moving average at the 3,675 level is the big area to watch out for. FX: USD on its back foot as market hopes for dovish downshift at FOMC meeting The market’s hope for a dovish downshift in the Fed’s guidance is a bit nuanced, as the expectations for the coming handful of meetings are back near the cycle highs, with the Fed funds priced to reach nearly 5.00% at the March or May FOMC meeting next year, while expectations farther out into next year and in 2024 are 25 or more basis points from the cycle highs. But with the USD on its back-foot and risk sentiment clearly unafraid of the Fed at the moment, the surprise side this Wednesday would be a stern message from the Fed that checks sentiment. Watching parity in EURUSD as an important psychological barometer, 1.1500 in GBPUSD, which was briefly broken yesterday, and eventually 145.00 in USDJPY and 7.25 area in USDCNH if the sudden USD drop overnight on hopes that China Covid policy is set for relaxation sticks and follows through. HG Copper (HGZ2) recovered all of Monday’s losses during Asian trading ...partly driven by a report that a “Reopening Committee” has been formed led by a Politburo Standing Member. The committee is reviewing data to assess various opening scenarios, targeting a March 2023 reopening. In addition to a weakening dollar and demand towards renewable energy, the copper market is being supported by persistent supply challenges highlighted by top supplier Codelco lowering its annual guidance for the second time in three months. The futures price remains stuck within a narrowing trading around $3.45 and looks poised for a breakout soon. Given the latest developments the risk of an upside break has risen. Gold (XAUUSD) trades higher … after falling for a third consecutive day on Monday, thereby extending its monthly losing streak to seven, the longest since the late 1960’s. The market bounced with support from lower bond yields and a softer dollar but as a minimum the yellow metal needs to break above $1730 before an end to the month-long downtrend can be called. The WGC reported that central banks bought a record 400 tons during the third quarter, more than quadruple the amount of a year earlier, thereby more than offsetting the 227 tons reduction in holdings across bullion-backed ETFs Crude oil (CLZ2 & LCOZ2) Crude oil trades higher within the established range after advancing with the broader market overnight as OPEC+ begins to cut production by around 1.2 million barrels per day, a decision that has been driven by excess supply according to its secretary-general. OPEC also released its World Oil Outlook in which they estimate demand will climb 13% to reach 109.5mb/d in 2035, then hold around that level for another decade. A weaker global economic growth hurting demand, OPEC+ production cuts and EU sanctions on Russian crude from December have all clouded the outlook, thereby supporting the current rangebound price action. Focus on Wednesday’s FOMC meeting and its potential impact on the dollar. Brent has since the September low several times been bouncing off trendline support, currently at $92 with resistance at $97.25 and $98.75. US treasuries (TLT, IEF) US 10-year treasury yields have eased back toward 4.00% after briefly touching above 4.1% yesterday. The focus on continued strength in bond markets will be the 3.90% pivot low yield posted last week, which could open up for a run to the 3.50% area, but would such a move represent a flight to safety (weak risk sentiment) or be celebrated as a sign of easing pressure on asset valuations. The key two event risks are the FOMC meeting Wednesday and how the yield curve reacts as well as the US jobs report on Friday, with the ISM Services Thursday also an interesting data point. What is going on? RBA hikes 25 bps, ups inflation forecasts, downgrades GDP and remains dovish Will the RBA stop hikes early? The RBA hiked the cash rate by 25bps (0.25%) as most expected to 2.85%, maintaining its dovish stance and bordering on restrictive, as it again acknowledged tighter financial conditions are yet to be felt in mortgage payments, but higher rates and inflation have put pressure on household budgets, causing a small amount of loan arrears and insolvencies. This rate hike cycle since May, has been the second fastest in history. We note the RBA was the first major central bank to under-deliver on rate hike expectations last month. The RBA raised its year-end 2022 CPI forecast from 7.8% to around 8%. The RBA revised its GDP forecast down, with growth of around 3% expected this year and 1.5% in 2023 and 2024. AUD knee-jerked lower on the decision, but recovered most of the lost ground against a stumbling US dollar in Asia, while sticking near local lows against the NZD. BP had exceptional Q3 in gas marketing and trading The European oil and gas major is lifting sentiment in Europe with strong net income beating expectations while cash flow generation is coming in below estimates. The energy company is increasing its buyback programme further by $2.5bn. Toyota down 2% on big operating income miss Japan’s largest carmaker is lowering its fiscal year production target as Volkswagen also recently did while posting a Q2 operating income of JPY 563bn vs JPY 765bn due to soaring materials costs and one-off items. The lower production target comes as the industry is still facing a chips shortage. UK Treasury says all Britons will have to pay more tax Chancellor Hunt said that “those with the broadest shoulders should be asked to bear the greatest burden” as the clear message from the new Sunak government, after the previous Truss-Kwarteng team triggered chaos in UK Gilts and sterling, is that financial stability is priority number one. The particulars of the new budget and policy will be laid out in a statement on November 17. US President Biden rails against oil companies not reinvesting profits, promising to raise taxes on profits that are “windfall of war”... ... saying that “The oil industry has not met its commitment to invest in America.” Such a move would require a bill to pass through Congress, however, which would likely prove difficult after the mid-term elections next week, if projections of a strong GOP showing flip the House and possibly the Senate into their hands, making for a largely lame-duck presidency for the next two years. Eurozone GDP and inflation prints continue to make the ECB’s job tougher Eurozone inflation data for October YoY printed another record as it soared to 10.7% (prev. 9.9%), and well above the median Bloomberg expectation of 10.3%. Meanwhile, Q3 GDP growth slowed to 0.2% QoQ or 2.1% YoY (prev. 0.8% QoQ, 4.1% YoY). While mild weather and full storage has not unleashed the full effects of energy shortages this year, the threat continues to loom, and this could mean the macro story could deteriorate further. Japan spent a record $42 billion to defend JPY in October The Finance Ministry is said to have another 10 trillion yen, or about $68 billion in ready cash left to throw after defending the JPY if pressure mounts again, although Japan’s central bank reserves are many, many multiples of these amounts, currently at $1.24 trillion. What are we watching next? Another small hike from a central bank (the RBA) encourages speculation of dovish shift at the FOMC meeting on Wednesday A number of recent central bank meetings of late, including the latest RBA meeting overnight, which saw Australia’s central bank only hiking rates 25 basis points for the second consecutive time, encourage the notion that the Fed is set for a dovish shift at this Wednesday’s FOMC meeting. Working against that narrative have been a number of possible “leaks” by journalists at key publications thought to have strong Fed sources, including the WSJ’s Nick Timiraos and a NY Times reporter, whose latest musings suggest that the Fed is not set to indicate any backing down from its hawkish message. An overtly defensive and hawkish FOMC meeting tomorrow could badly shock the market, which coming into this morning, at least, seems hopeful that the Fed is set to downshift its tightening guidance this week. Or at least, given that Fed expectations for the next six months or so are within a few basis points of the cycle highs, isn’t obviously afraid of the message the Fed is set to deliver: equities are up near the local highs after a ripping rally off October lows. Earnings to watch Today’s US earnings focus is AMD, Airbnb, and Uber with analysts expecting revenue growth of 31% y/y for AMD but EPS down 5% y/y as input pressures are eating up growth coming from strong product introductions. Airbnb is still riding the reopening tailwind with revenue expected to increase 26% y/y in Q3 and EBITDA expanding significantly to $1.39bn up from $888mn a year ago. Uber has a goal of becoming self-funded by 2024 and could achieve this based on the current trajectory. The company is expected to deliver revenue growth of 67% y/y and EPS of $-0.06 up from $-0.42 a year ago. Today: Toyota Motor, Sony, BP, Eli Lilly, Pfizer, AMD, Mondelez, Airbnb, Uber Wednesday: Suncor Energy, Nutrien, Novo Nordisk, Maersk, Vestas Wind Systems, GSK, Electronic Arts, Qualcomm, CVS Health, Estee Lauder, Booking, Fortinet, Ferrari, Albemarle Thursday: Verbund, Barrick Gold, Orsted, Novozymes, BNP Paribas, BMW, Enel, ING Groep, DBS Group, ConocoPhillips, Amgen, PayPal, Starbucks, Regeneron Pharmaceuticals, EOG Resources, Moderna, MercadoLibre, Block, Cloudflare, Coinbase Friday: Enbridge, Societe Generale, Intesa Sanpaolo, SoftBank, Amadeus IT Group, Duke Energy, Economic calendar highlights for today (times GMT) 0820 – Australia RBA Governor Lowe to speak 1400 – US Sep. JOLTS Job Openings 1400 – US Oct. ISM Manufacturing 2000 – New Zealand RBNZ publishes Financial Stability Report 2030 – API Weekly Report on US Oil Inventories 2145 – New Zealand Q3 Average Hourly Earnings 2145 – New Zealand Q3 Employment Change/Unemployment Rate 2230 – Canada Bank of Canada Governor Macklem to speak 0030 – Australia Sep. Building Approvals Follow SaxoStrats on the daily Saxo Markets Call on your favorite podcast app: Apple  Spotify PodBean Sticher   Source: https://www.home.saxo/content/articles/macro/market-quick-take-nov-1-2022-01112022
The Melbourne Institute Inflation Gauge For Australia Rose More Than Expected

The Reserve Bank of Australia (RBA) Hikes By 25bp | Bitcoin Could Rebound

Swissquote Bank Swissquote Bank 01.11.2022 10:06
Equities fell and bond yields rose, as the hawkish Federal Reserve (Fed) fears resurfaced before Wednesday’s FOMC decision. Fed The Fed starts its two-day meeting, and could call the end of the aggressive rate tightening and signal slower rate hikes to enter the final phase of policy tightening, before pausing. But the Fed will not want to throw the foundation of a market rally, which could play against its fight against inflation. Eurozone In the Eurozone, inflation hit a record high of 10.7% in October, versus 10.2% expected by analysts, and the European Central Bank (ECB) Chief Christine Lagarde said that inflation came from nowhere, ignoring a decade-and-a-half of aggressive bond buying that threw the foundations of the present spike in inflation, boosted by the pandemic, the war and a global energy crisis The Eurozone yields spiked on expectation that higher inflation would mean higher ECB rate hikes in the future. But the euro didn’t gain, as currency traders priced in the rising recession fears that come along with the higher interest rates. Rate Hike In Australia, the Reserve Bank of Australia (RBA) raised the interest rates by 25bp as expected and said there will be more rate hikes. The Losses In Switzerland, the Swiss National Bank announced a 142 billion franc loss in the first nine months of the year; melting currency valuations, especially the melting euro, was to blame. Gold In precious metals, gold remains under pressure. The $1615 is the next important support. If the US dollar strengthens as a result of a sufficiently hawkish Fed statement this week, gold bears could pull out the $1615 support and tip a toe into the $1500s for the first time since April 2020. Watch the full episode to find out more! 0:00 Intro 0:28 EZ inflation hits record, EZ yields rise, but euro falls 2:24 Two-day FOMC meeting starts today. What to expect? 5:28 Quick update: Apple, Exxon 6:56 How could oil respond to Fed decision? 7:55 RBA hikes by 25bp 8:18 SNB loses 142 billion francs 8:46 Gold to test important support 9:08 Bitcoin could rebound if risk appetite improves Ipek Ozkardeskaya Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Fed #FOMC #RBA #rate #decision #Eurozone #inflation #crudeoil #ExxonMobil #Apple #Foxconn #China #covidzero #USD #AUD #EUR #CHF #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary ___ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr ___ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 ___ Let's stay connected: LinkedIn: https://swq.ch/cH
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

Statements Of ECB's Member About Inflation And Monetary Policy

TeleTrade Comments TeleTrade Comments 03.11.2022 10:20
European Central Bank (ECB) executive board member Fabio Panetta said on Thursday, “we need to bring inflation back to our 2% target as soon as possible, but not sooner”. Additional quotes   Medium-term inflation outlook presents clear upside risks. Further policy adjustment is warranted. We must calibrate our monetary policy carefully to ensure inflation durably returns to target, while also guiding market expectations and limiting excess volatility. He of our stance should not rely on a one-sided view of risks. We must avoid excessive focus on short-run developments and fully taking into account the risks. The neutral interest rate provides limited guidance here. We also need to stand ready to address collateral issues. I  prefer the concept of the target-consistent rate to that of the neutral rate. Maintaining ample liquidity in the system will help ensure smooth money market functioning. Ready to intervene in a timely manner to counter unwarranted market dysfunctions, should they arise. We should ensure that TLTRO repayments have been absorbed before we stop fully reinvesting the principal payments. A controlled reduction – whereby only redemptions above a cap are not rolled over – is preferable to active sales. A bigger-than-expected rate increase may heighten volatility and have a stronger impact in the current highly leveraged environment. We need to pay close attention to ensuring that we do not amplify the risk of a protracted recession. Our policy rate remains a suitable marginal instrument of normalization. If these bigger-than-expected increases are interpreted as signalling a higher terminal rate, we could have a stronger impact on financing conditions. We have a comparatively limited understanding of the effects of reducing the size of our balance sheet.   Market reaction The EUR/USD pair was last seen trading at 0.9786, down 0.31% on the day.
Oil Prices Rise as OPEC Cuts Output and API Reports Significant Inventory Drawdown

The Bank Of England (BoE) Is Likely To Follow The Fed

InstaForex Analysis InstaForex Analysis 03.11.2022 14:23
The US stock market continues to fall sharply. Stock index futures continued their decline as Jerome Powell warned that the Federal Reserve would raise interest rates further, if necessary. This undermined risk appetite. The US dollar eventually won. S&P 500 futures declined by 0.7% after falling by 2.5% on Wednesday. The industrial Dow Jones lost about 0.4% and the high-tech NASDAQ index sank by nearly 1.0%. Two-year Treasuries rose to 4.72% and remained below the 5.06% yield peak. The sell-off spread to Europe and Asia. China intends to continue its Covid-Zero policy and this dashed investor hopes. Meanwhile, the market is focused on another central bank. The Fed made a 75 bps hike and the Bank of England is likely to follow suit. Although the interest rate in the UK is much worse than in the US, the regulator is not expected to give up its fight against inflation, even amid an expected severe recession in the economy. Yesterday, Fed Chairman Jerome Powell disappointed traders who had bet on a reversal, saying that the US economy remains resilient, which will continue to spur inflation. A similar situation occurred at the end of the summer of this year, when investors, encouraged by a bullish rally suffered huge losses. History repeats. Every time the market participants hope for a bit of dovish rhetoric, they watch the market crash and burn. While investors are concerned about the impact of the central bank's tightening policies on economic growth, Powell said there was no doubt that the committee was ready to raise rates as high as necessary at any time to calm inflation. ECB President Christine Lagarde also spoke today and warned that a moderate recession in the eurozone may be coming soon but it was not enough to stop price hikes. Meanwhile, the US dollar rose against risky assets. The British pound fell by more than 1%, as fears that the Bank of England's interest rate hike could worsen the situation in the economy increased. The rally in Chinese stocks also came to an end before it could begin amid rumors of Covid Zero cancellation. However, this rumor remained a rumor. Economists see a further sell-off in emerging markets in Asia as the US dollar is rising. Wheat prices fell after Russia agreed to renew a deal allowing the safe passage of Ukrainian crop exports. Oil fell after Powell's comments on interest rates overshadowed supply cuts. As for the technical picture of the S&P 500 index, after yesterday's decline, the demand for the index remains rather sluggish. Bulls need to protect the support of $3,735. As long as the trading instrument is trading above this level, we can expect the demand for the risky assets to come back if the US data occurs to be weak. This may strengthen the index and bring it back to the level of $3,773 under control, opening the way to the level of $3,808. If the price breaks through this level, it may start an upward correction and reach the resistance of $3,835. The next target is located at $3,861. If the index declines, bulls will have to show some activity at $3,735. If this level is pierced, the trading instrument may be pushed down to $3,699 and to a new support of $3,661.     Relevance up to 12:00 2022-11-04 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326184
The German Purchasing Managers' Index, ZEW Economic Sentiment  And More Ahead

No Longer Dismisses The Possibility Of A Recession In The Eurozone

ING Economics ING Economics 06.11.2022 11:27
The eurozone economy expanded in the third quarter, but most recent data suggests that the recession has already started. Double-digit inflation is keeping the ECB in tightening mode, though substantial progress has been made in withdrawing stimulus. That means we're unlikely to see any more rate hikes after February next year In this article Growth surprises positively in the third quarter Consumption is likely to cave in Horror inflation Substantial progress in withdrawing stimulus Growth surprises positively in the third quarter The eurozone registered an unexpected 0.2% Quarter-on-Quarter expansion in the third quarter. Not surprisingly Spain, Italy and France did see growth on the back of a good tourism season, but Germany also performed much better than expected with 0.3% QoQ growth. However, it is striking to see that economic data has started to deteriorate strongly after the summer holidays. The eurozone composite PMI flash estimate fell to a lower-than-expected 47.1 in October. This is just a near 2-year low but also the fourth consecutive month that the PMI is hovering below the 50 boom-or-bust levels, clearly suggesting negative GDP growth. We get the same story from the European Commission’s economic sentiment indicator: it fell in October for the eighth month in a row to the lowest level since November 2020. The forward-looking components of the business surveys such as hiring intentions and new orders are heading south, a signal that the downturn is likely to intensify in the coming months. Consumption is softening Source: Refinitiv Datastream Consumption is likely to cave in Admittedly, consumer confidence improved slightly in October, but it remains close to the historical low reached in September. As households are expecting higher unemployment in the next 12 months, their intentions to make major purchases, renovate their homes or purchase a house, are all at very low levels. This strong cooling of consumption is also seen in high-frequency data such as hotel bookings, which are showing a post-summer dip. To be sure, in most countries there is budgetary support to alleviate the energy bills, but we don’t expect this to be sufficient to generate positive consumption growth in the coming quarters. With the significant rise in interest rates, accompanied by tighter credit standards, the real estate market is starting to cool rapidly in several countries, putting downward pressure on house prices. This is likely to impact construction activity negatively over the coming year. We're reiterating our forecast of a GDP contraction in the fourth quarter of this year and in the first of 2023. But there's more. The ECB's current tightening policies and the still difficult energy transition away from Russian gas will restrain the recovery thereafter. On the back of the better third-quarter numbers, we've revised our 2022 eurozone growth forecast up to 3.1%. For 2023 we are now pencilling in -0.7% growth and for 2024 1.3%. Horror inflation The October inflation data, published on Halloween, was another shocker: 10.7% headline inflation and 5.0% core inflation. The good news is that upstream in the supply chain there finally seems to be some moderation in price pressures. Supply chain delays eased to the lowest level for over two years, with shipping and material prices now clearly coming down. With inventories of finished products rising rapidly, pricing power is also likely to wane. On the back of the mild October weather, natural gas prices have also softened significantly, though we expect prices to rise again over the coming months when more normal winter temperatures set in. But even then, the contribution of energy to headline inflation is likely to diminish gradually. For 2022 we are now looking at 8.4% inflation and for next year, 5.6%. High inventories are likely to depress pricing power Source: Refinitiv Datastream Substantial progress in withdrawing stimulus The European Central Bank no longer dismisses the possibility of a recession, though we will have to wait for the December staff forecasts to know whether it will become the base case. For the time being the bank is still in tightening mode. But at the same time, it acknowledges that substantial progress has been made in withdrawing monetary stimulus. While the Bank's president, Christine Lagarde, didn’t want to put a figure on the neutral or the terminal interest rate during the press conference after the last rate hike, Banque de France President, Villeroy de Galhau, stated on several occasions that the neutral nominal interest rate is believed to be close to 2%. We, therefore, maintain our forecast of a deposit rate of 2% in December and a final rate hike of 25bp in February. The ECB is also likely to announce the conditions that will trigger the start of Quantitative Tightening. We believe that it will begin in the second quarter of 2023 at the earliest, basically through no longer fully reinvesting the Asset Purchase Programme portfolio. This will only have a minor impact on excess liquidity and bond yields next year. TagsMonetary policy Inflation GDP Eurozone ECB   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

In USA Inflation Is Showing Little Sign Of Slowing

ING Economics ING Economics 05.11.2022 09:13
We're now expecting the Fed Funds Rate to hit 5% early next year, albeit in more modest steps. We also think there are limits to how much further both the European Central Bank and Bank of England can hike rates amid a looming recession In this article Federal Reserve European Central Bank Bank of England People's Bank of China Central banks: Our forecasts Source: Macrobond, ING Federal Reserve After four consecutive 75bp Federal Reserve interest rate increases officials have opened to door to a slower pace of hikes from December. The harder and faster a central bank moves into restrictive territory, the less control over the outcome and the greater chance of an adverse reaction. Given the state of the residential real estate market and the deteriorating corporate and consumer outlook, recession in the US now looks unavoidable. However, inflation is showing little sign of slowing. We need 0.1% or 0.2% month-on-month core inflation readings to get the annual rate down to 2% rather than the 0.5% or 0.6% MoM increases in ex-food and energy prices we are seeing. So, while the pace of hikes may slow, the expected terminal rate keeps moving higher. Nonetheless, with housing rents and used car prices now falling, and corporate pricing power being squeezed by the downturn, we think a 5% Fed Funds Rate will mark the peak in February and the door will open for rate cuts through the second half of 2023. European Central Bank The ECB’s October meeting had something for everyone. Another jumbo rate hike of 75bp and the opening for more for the hawks, but also more recession warnings and an opening to a dovish pivot in December for the doves. Consequently, the times of uncontested decisions at the ECB seem to be over. The December meeting will be much more controversial with a looming recession and a high chance that the ECB’s longer-term inflation forecasts will point to a sharp inflation retreat in 2024 and 2025. These aren't really the best arguments to hike into restrictive territory. We expect the ECB to deliver rate hikes totalling 75bp at the December and February meetings. The balance sheet reduction has started with the announced changes to the ECB’s longer-term loans to banks and the option for earlier repayments. More will follow as a gradual phasing out of the reinvestments of asset purchases could become a substitute for additional rate hikes in 2023. Bank of England Markets have pared back interest rate expectations in light of a more stable fiscal backdrop but are still pricing Bank Rate to near 5% next year. Bank of England officials have begun to hint more explicitly that this would come with huge damage to the economy and is inconsistent with the amount of tightening needed to get inflation lower. Still, policymakers face an unpalatable decision. If they undershoot market rate expectations, the risk is that we see a renewed downside for the pound – not least because a full-blown pivot from the Federal Reserve seems at least a few months off. That helps explain why the BoE accelerated the pace of rate hikes in November. But doing so repeatedly risks baking in mortgage rates and corporate borrowing costs which risk material stress in the economy. Around a third of mortgages are fixed for two years, while small and medium-sized enterprises (SMEs) are typically on floating interest rate products. We therefore expect the Bank to undershoot market expectations and remain unconvinced Bank Rate will go above 4% next year. We think the 75bp hike was a one-off. People's Bank of China The PBoC seems to have abandoned the traditional monetary policy tool of policy rate cuts and Reserve Requirement Ratio (RRR) cuts as a means to support the economy. Instead, the central bank has increased liquidity via policy banks in China. These policy banks lend directly to local governments for a specific policy target, for example, to finish unfinished home construction projects. This should be more time efficient as commercial banks would not be able to lend to property developers due to the still restrictive policies set for property developers, and they would be reluctant to lend to construction companies. This kind of direct lending to local government avoids them having to increase bond issuance, and therefore reduces interest costs of local governments in general. We expect the central bank to increase liquidity injections through policy banks until all unfinished residential projects are completed. TagsPBoC Federal Reserve ECB Central banks Bank of England   Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
Upcoming Corporate Earnings Reports: Ashtead, GameStop, and DocuSign - September 5-7, 2023

Good Retail Sales Result In Europe | Household Spending In Japan Has Declined

Kamila Szypuła Kamila Szypuła 08.11.2022 11:14
There are no important reports scheduled for today that could significantly affect the markets. Today the attention is focused on the mid-term election in the USA and on the speeches of representatives of central banks on the old continents. Japan Household Spending Japan has published a report on household spending. The result of this report was not satisfactory. The current level of 2.3% was lower than expected. It was expected to drop from 5.1% to 2.7%. This year in Japan, spending is not looking very well. They reached the level below zero several times, and the last scare was a false signal. The monthly change in household spending is already more positive. The current score of 1.8% has increased from 1.7%. Which means that within a month there was an increase in expenses, but compared to last year, the result was negative. Household expenditure is an important factor in building the country's economy and has a significant impact on the GDP level. The less households spend, the smaller the turnover is, which affects the number of companies. The profits of companies in such a situation can sleep. This situation will significantly affect individuals. Observing this indicator, it can be concluded that households have started to save to a greater extent, and thus it gives a signal about the plunging situations of life in this country. BRC Retail Sales Monitor The value of same-store sales in BRC-member retail outlets in the U.K decreased from 1.8% to 1.2%. This is a negative result despite the fact that a decrease has been reported. this decline was 0.5% larger than expected. This year is not the best. After the record level in February, there were declines and sales were negative for several months. Speeches At 9:15 CET there were speeches from the old continent. Speakers were the German Buba President Nagel, member of German Buba Wuermeling and ECB's Enria. They probably spoke at 10:00 CET. Information provided in speeches that the focus is on closing inflation and thus on raising rates. At 10:30 CET, the SNB Gov Board Member Maechler also took the floor and thus gave instructions on Switzerland's moetary policy. At 11:00 CET a representative of the Bank of England also took the floor. The speaker was Huw Pill. His statement may turn out to be a signal for the motoring policy, and thus it may direct the pound's (GBP) situation in the present day. He is expected to speak again at 18:00 CET. Outside the European continent, a representative of the Reserve Bank of Australia (RBA) also spoke at 11:30 CET. The speaker was Governor Philip Lowe. As a key adviser to RBA board members, who decide short term interest rates, Lowe has considerable influence over the value of the Australian dollar. Traders scrutinize his public engagements for clues regarding future monetary policy. EU Retail Sales Retail sales figures from the European bloc were also published today. An improvement was expected in the monthly and in the annual shift. As a result of retail sales, y/y growth was expected from -2.0% to -1.3%. Also in the monthly change, the projected increase from -0.3% to 0.4%. The current readings are positive. The annual change in retail sales rose to 0.6%, and the monthly change met expectations. The current result in such a difficult economic situation is interpreted as a slight improvement, i.e. a positive report. Summary 1:30 CET Japan Household Spending 2:01 CET BRC Retail Sales Monitor 9:15 CET German Buba President Nagel Speaks 9:15 CET German Buba Wuermeling Speaks 9:15 CET ECB's Enria Speaks 10:30 CET SNB Gov Board Member Maechler Speaks 11:00 CET BoE MPC Member Pill Speaks 11:30 CET RBA Governor Lowe Speaks 12:30 CET EU Retail Sales (MoM) (Sep) 18:00 CET BoE MPC Member Pill Speaks Although there were no important reports today, one should watch the following days. Source: https://www.investing.com/economic-calendar/
Assessing 'Significant Upside Risks to Inflation': Insights from FOMC Minutes

High Inflation, The Aggressive Fed And Geopolitical Uncertainty Increases The Likelihood Of A US Recession

InstaForex Analysis InstaForex Analysis 09.11.2022 08:15
In my previous reviews, I pointed out that the wave structures of the two instruments I analyze daily were about to see the completion of the ascending sections of the trend. These sections will comprise 5 waves, and they won't be impulse ones. This is the most likely scenario because demand for the dollar may soar in the near term. Let's now analyze possible reasons for a stronger greenback. Future decisions This article is mostly about Goldman Sachs Group. Its analysts have downgraded their forecasts for EUR to $0.94 from $0.97 for the coming three months. In the course of its latest fall, the instrument approached $0.95. Given the latest forecast, we may expect the descending section of the trend to resume its formation or a new section to build up. According to Goldman Sachs, having a floating target, the US Federal Reserve may raise interest rates to 5% by March 2023, with one increase of 0.50% and two increases of 0.25%. Meanwhile, other central banks, including the Bank of England and the ECB, won't have any floating targets. Therefore, monetary policy divergence may deepen towards the US dollar. Economic growth in the United States In addition, Goldman Sachs says there is a 35% probability of the United States entering a recession in the coming 12 months, citing high inflation, the aggressive Federal Reserve, and geopolitical uncertainty. The company underlined that its forecast is more optimistic compared to the outlooks from other firms and banks because it foresees a realistic scenario of an economic path from high inflation to low inflation and without a recession. Economic growth in the United States is expected to fall below the trend line but remain above zero. The balance in the labor market is likely to be restored, and unemployment growth to be limited. The euro and the pound If it is an accurate forecast, the US economy is unlikely to get hurt badly. If a recession is weak and inflation gets back to 2% rather fast, there will be still no reason for an increase in demand for the dollar because analysts do not expect an easy path for the European or British economy. BoE Governor Bailey announced the British economy entered a recession in the third quarter, which may last for 2 years. Meanwhile, the ECB will hardly lift interest rates to 5% because the European Union is not a single country but a union of nations in different financial situations. Some countries will survive high rates painlessly, some may need economic support for quite a long time. By economic aid, we mean new allocations and stimulus programs, and this is something the ECB would like to avoid. Thus, the dollar again looks more promising than the euro and the pound. The sum up Based on the analysis, we may anticipate that the formation of the ascending trend section will become more complex and comprise up to five waves. It may be that the fifth wave of this section is now building up. Therefore, consider buying with targets located above the peak of wave c, based on the reversals of the MACD to the upside. The entire section of the trend after September 28th now has the a-b-c-d-e structure. However, once it is complete, the formation of a new downtrend section may begin.     Relevance up to 05:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326596
Technical Analysis Of The EUR/USD Pair By Jakub Novak

Technical Analysis Of The EUR/USD Pair By Jakub Novak

InstaForex Analysis InstaForex Analysis 09.11.2022 08:24
Analysis of transactions in the EUR / USD pair The test of 0.9986 happened when the MACD line moved down quite a lot from zero, which limited the further downside potential of the pair. Some time later, another test took place, but this time the MACD line was in the oversold area, so the pair rose by about 35 pips. As for short positions at 1.0079, they led to losses. Although retail sales in the Euro area coincided with forecasts, the market was not affected in the morning. But by afternoon, euro shot up as the start of the US midterm elections weakened dollar's position due to the majority in Congress being taken by the Republicans Today, ECB member Frank Elderson is scheduled to speak, but it will be of little interest. There are also no important fundamental statistics, so the market will return to balance ahead of tomorrow's inflation data in the US. Statements by FOMC members John Williams and Thomas Barkin, along with US wholesale inventory changes, will also be of little interest. Only the next election results will lead to a surge in volatility. For long positions: Buy euro when the quote reaches 1.0088 (green line on the chart) and take profit at the price of 1.0141. But growth is unlikely to occur today, so be careful with buying at the highs. Nevertheless, remember that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 1.0044, however, the MACD line should be in the oversold area as only by that will the market reverse to 1.0088 and 1.0141. For short positions: Sell euro when the quote reaches 1.0044 (red line on the chart) and take profit at the price of 1.0004. Pressure will return after hawkish statements from Fed representatives and news on the midterm elections in the US. Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0088, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0044 and 1.0004. What's on the chart: The thin green line is the key level at which you can place long positions in the EUR/USD pair. The thick green line is the target price, since the quote is unlikely to move above this level. The thin red line is the level at which you can place short positions in the EUR/USD pair. The thick red line is the target price, since the quote is unlikely to move below this level. MACD line - when entering the market, it is important to be guided by the overbought and oversold zones. Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.   Relevance up to 07:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326608
Britain's Rishi Sunak And EU's Ursula Von Der Leyen Will Meet Today To Finalize The Northern Ireland Drama

The UK Demanding That The European Court Of Justice Be Stripped Of Its Role In Settling Brexit Disputes

InstaForex Analysis InstaForex Analysis 09.11.2022 12:09
UK and the European Union are rumored to be close to a major breakthrough in the months-long dispute over Northern Ireland's post-Brexit trading rules. Initially, the problem threatens a full-scale trade war, but the current crisis in which both regions experience record inflation seem to have made authorities do everything to find common ground. According to reports, the EU has begun testing the current UK database that tracks goods moving from the UK mainland to Northern Ireland. If they are satisfied with the system's performance, an agreement on customs checks in the Irish Sea may be signed. This recent upswing regarding negotiations allows Prime Minister Rishi Sunak's government to hope the deal will defuse tensions in the region and help the government resolve a number of problems. However, another key point to be addressed is the UK demanding that the European Court of Justice be stripped of its role in settling Brexit disputes in the region, which is not acceptable to the EU. The representative of the European Commission declined to comment on the progress of the talks, as did the British Foreign Office. Nevertheless, resolving the issue is beneficial as it would help correct supply chain disruptions and ease price pressures, especially if the Bank of England continues to increase rates at the current pace, which could push GDP down by up to 3.0% next year. GBP/USD In terms of GBP/USD, buyers are now focused on defending the support level of 1.1510 and breaking through the resistance level of 1.1590. This limits the upside potential as only a breakdown of 1.1590 will lead to a rise to 1.1690, 1.1730 and 1.1780. If pressure returns and sellers take control of 1.1510, the pair will drop to 1.1430 and 1.1360. EUR/USD In EUR/USD, sellers are not very active yet, so buyers have a chance to push the pair above 1.0090. A breakdown will spur growth to 1.0140, while a drop below 1.0030 will push euro back to 0.9970, 0.9920, 0.9880 and 0.9830.   Relevance up to 08:00 2022-11-10 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326624
The Euro Will Probably Continue Its Upward Movement In The Near Future

The ECB Will Not Bring The Situation To A Critical Mass

InstaForex Analysis InstaForex Analysis 10.11.2022 08:44
On Wednesday, the EUR/USD currency pair began a new round of corrective movement while failing to update its previous local maximum. We've said before why this is important. If the previous highs are not updated, then there is no upward trend. Thus, a price reversal near the level of 1.0010 followed by a fall to the moving average line is very bad for the euro currency. However, we have already talked about the illogical growth of the pair in the last few days. We believe that the events of last week should have provoked a new powerful strengthening of the US currency, but not the growth of the European one. From our point of view, non-farms were strong enough, and the unemployment rate did not rise critically to sound the alarm and shout about a recession. Moreover, the recession itself may still be avoided. Some forecasts say the probability of its occurrence in the coming year is no more than 35%. And a year later, the Fed may already start lowering the key rate, which will slowly accelerate the economy again. Based on this, we believe the most logical development would be a new fall in the euro. Recall that Alan Greenspan, the former head of the Fed, believes that the US dollar will strengthen next year. Goldman Sachs lowered its 3-month forecast for the euro/dollar pair from 0.9700 to 0.9400. Thus, many significant experts do not believe that now the European currency will move to the formation of a long-term uptrend. We fully agree with this assessment because we also do not see how the euro can increase over a long distance. The Fed is not even thinking about stopping raising the rate yet, the ECB is unlikely to catch up with the Fed in terms of the rate level, and even these two factors alone suggest that the pair, at least, will not grow much and for a long time. Therefore, we believe that the decline will resume. Maybe it will no longer be large-scale and collapse, but the euro will not grow to 1.1000. Goldman Sachs forecast the Fed rate at 5%, but this may not be the limit. As mentioned above, almost all experts believe the Fed rate will continue to rise. The only question is to what level it will eventually grow. Recall that at the beginning of the year, the most "hawkish" member of the Fed monetary committee, James Bullard, spoke about raising the rate to 3.5%. Now no one doubts that the rate will rise to 4.75%, and some experts predict stronger growth. For example, Goldman Sachs economists believe the rate will rise to 5%. We believe that everything will depend on inflation. If it shows the same rate of slowdown as in the last two months, the Fed will receive the necessary grounds for further tightening monetary policy. Naturally, the higher the rate, the longer it will grow, and the more reason the dollar will continue to enjoy increased demand and strengthen against its competitors with lower rates. ECB head Christine Lagarde said last week that her department also intends to continue to fight high inflation. Still, in the case of the European regulator, it is unclear how far it can go in tightening monetary policy. We have already written earlier that not all EU countries can withstand the burden on the economy in the form of a 5% key rate. Most likely, the ECB will not bring the situation to a "critical mass." We believe that the ECB will stop somewhere in the middle to slow down inflation as much as possible, but at the same time, not bring the state of weak economies to a catastrophic state. This will mean that the rate will rise to a maximum of 4%, which is unlikely enough to return inflation to 2%. Therefore, the cost of borrowing will be more expensive in the United States, and bank deposits are also more profitable in the United States. You can make elementary money by taking a European loan and placing it on a deposit in the USA. This is a joke, but cash flows can continue to flow from Europe overseas. The average volatility of the euro/dollar currency pair over the last five trading days as of November 10 is 134 points and is characterized as "high." Thus, we expect the pair to move between 0.9897 and 1.0165 on Thursday. The upward reversal of the Heiken Ashi indicator signals the resumption of the upward movement. Nearest support levels: S1 – 1.0010 S2 – 0.9888 S3 – 0.9766 Nearest resistance levels: R1 – 1.0132 R2 – 1.0254 R3 – 1.0376 Trading Recommendations: The EUR/USD pair continues to be located above the moving average. Thus, now we should consider new long positions with targets of 1.0132 and 1.0165 in the case of a reversal of the Heiken Ashi indicator upwards. Sales will become relevant again no earlier than fixing the price below the moving average line with targets of 0.9888 and 0.9766. Explanations of the illustrations: Linear regression channels – help determine the current trend. The trend is strong if both are directed in the same direction. The moving average line (settings 20.0, smoothed) – determines the short-term trend and the direction in which trading should be conducted now. Murray levels are target levels for movements and corrections. Volatility levels (red lines) are the likely price channel in which the pair will spend the next day, based on current volatility indicators. The CCI indicator – its entry into the oversold area (below -250) or into the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.   Relevance up to 01:00 2022-11-11 UTC+1 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade. Read more: https://www.instaforex.eu/forex_analysis/326707
Bank of England survey highlights easing price pressures

The UK Central Bank (BoE) Expects A Recession To Last For All Of 2023

TeleTrade Comments TeleTrade Comments 10.11.2022 09:51
EURGBP lacks any firm intraday direction and oscillates in a range on Thursday. A combination of factors, however, continues to act as a tailwind for the cross. Talks for aggressive tightening by the ECB underpin the Euro and offers support. The BoE’s bleak outlook for the UK economy supports prospects for further gains. The EURGBP cross is seen oscillating in a range, around the 0.8800 round-figure mark through the early European session and consolidating the overnight strong gains to a nearly one-month high. The Bank of England's gloomy outlook for the UK economy turns out to be a key factor behind the British Pound's relative underperformance and acts as a tailwind for the EURGBP cross. In fact, the UK central bank expects a recession to last for all of 2023 and the first half of 2024. Moreover, the BoE last week indicated a lower terminal peak than was priced into the markets. The shared currency, on the other hand, continues to draw some support from bets for a more aggressive policy tightening by the European Central Bank (ECB). Several ECB policymakers, including President Christine Lagarde, indicated that the central bank will keep raising rates aggressively to tackle red-hot consumer inflation, which accelerated to a record high of 10.7% in October. This, in turn, pushed Germany’s short-dated yields to fresh multi-year highs earlier this week and adds credence to the near-term positive bias for the EURGBP cross. Even from a technical perspective, the previous day's sustained move and acceptance above the 0.8775-0.8780 supply zone support prospects for an extension of a nearly three-week-old uptrend. There isn't any major market-moving economic data due for release on Thursday, either from the Eurozone or the UK. Hence, the focus remains on the Preliminary UK Q3 GDP print on Friday. Investors will also look forward to British Finance Minister Jeremy Hunt's fiscal statement on November 17. Nevertheless, the fundamental backdrop seems tilted in favour of bullish traders.
Positive Shift in Inflation Structure: Core Inflation Falls in Hungary

RICS House Price Balance Is Below Zero | Inflation Data From Both Americas Are Ahead

Kamila Szypuła Kamila Szypuła 10.11.2022 11:30
Today there are no major economic events than the result of the US CPI report. In addition, there will be important speeches by members of the FOMC and other central banks, including the Bank of England of Canada. RICS House Price Balance The Royal Institution of Chartered Surveyors (RICS) House Price Balance was published early in the day. The result showed that the index fell sharply below zero. The current reading is at -2%. A drop from 30% to 20% was forecast, but the current figure has turned out to be more drastic. This means that house prices in the designated area have dropped drastically. There has been a decline in prices since May, and the present one signifies a significant deepening of this trend. The first speeches The first speech of the day took place at 2:45 CET. The speaker was Michele Bullock serves as an Assistant Governor of the Reserve Bank of Australia (RBA). The next speech was from America. Fed member Christopher J. Waller spoke at 9:00 CET More speeches Ahead Today also representatives of European banks will take the floor. Andrea Maechler serves as Governing Board Member of the Swiss National Bank (SNB) is set to speak at 14:30 CET. At the same time will be speak Andrea Enria, Chair of Supervisory Board of the European Central Bank. Speech by representatives of the Bank of England is scheduled for 15:00 CET and 15:10 CET. Speakers in turn: David Ramsden, Deputy Governor of the Bank of England and Silvana Tenreyro, a member of the Monetary Policy Committee (MPC). Another Fed speech and one from the Bank of Canada are also planned. Bank of Canada Member Governor Tiff Macklem will speak at 6:50 PM CET. After the published reports, the following will speak: Federal Reserve Bank of Philadelphia President Patrick Harker, Federal Open Market Committee (FOMC) Member Mester and Federal Reserve Bank of Kansas City President Esther George. All speeches can provide valuable information about the future of monetary policy actions of the banks concerned. ECB Economic Bulletin At 11:00 CET the ECB published a Bulletin. The Economic Bulletin provides a comprehensive analysis of economic and monetary developments and interim updates on key indicators. Which can help investors to assess the future development of this region, as well as summarize the effectiveness of ECB's work South Africa Manufacturing Production Today, South Africa will also publish a report on Manufacturing Production. The shift from Y / Y of output produced by manufacturers is forecast to decline from 1.4% to -2.4%. A smaller index in this sector may indicate serious problems which the country's economy is struggling with, which will hinder the growth. Brazil CPI Brazil as well as the United States will publish inflation data. In South America's largest economy, Y/Y inflation is expected to decline from 7.17% to 6.34%. It is very likely as the CPI has been in a downward trend since July. Meanwhile, the CPI m/m is expected to increase from -0.29% to 0.48%. US CPI Expectations for US inflation are positive. Slightly dropping is expected. Read more: Inflation In The USA Has A Chance Of Cooler| FXMAG.COM Initial Jobless Claims The number of individuals who filed for unemployment insurance for the first time during the past week is expected to increase by 3K weekly report. The last reading was at 217K and it was a positive reading as the level persisted for another week and the forecasts will increase to 220K. At 15:30 CET it will turn out if the reading is positive this time. Summary: 2:01 CET RICS House Price Balance 2:45 CET South Africa Assist Gov Bullock Speaks 9:00 CET Fed Waller Speaks 11:00 CET ECB Economic Bulletin 13:00 CET RPA Manufacturing Production 14:00 CET Brazil CPI 14:30 CET SNB Gov Board Member Maechler Speaks 14:30 CET ECB's Enria Speaks 15:00 CET MPC Member Ramsden Speaks 15:10 CET MPC Member Tenreyro Speaks 15:30 CET US CPI 15:30 CET Initial Jobless Claims 16:00 CET FOMC Member Harker Speaks 18:50 CET BoC Gov Macklem Speaks 19:30 CET FOMC Member Mester Speaks 20:30 CET FOMC Member George Speaks Source: https://www.investing.com/economic-calendar/
Long-Term Yields Soar Amidst Hawkish Fed: Will They Reach 5%?

The ECB May Need To Hike More Than Markets Expect

ING Economics ING Economics 10.11.2022 13:19
US CPI readings have had a habit of disappointing, and markets' stronger footing into the release and an ongoing preoccupation with a 'pivot'-narrative make it look more susceptible to such an outcome. In any case, Fed officials may see little reason yet to signal less tightening on aggregate given inflation is still wide of the mark In this article One slower inflation print may not yet mean the Fed will want to signal less tightening in sum ECB sticks with hawkish tones Today's events and market view One slower inflation print may not yet mean the Fed will want to signal less tightening in sum The US October CPI will be today’s main flashpoint. The consensus is for headline inflation to slow to 7.9% and the core rate to ease to 6.5%. The main focus should be on the month-on-month core rate, which is seen ticking down to 0.5% from 0.6%. Mind you, readings closer to 0.2% is what would be needed to bring the rate closer to the Fed’s 2% target, so anything we will see today will still signal central bankers that they are wide off the mark. Today will still signal to central bankers that they are wide of the mark     But coming in the wake of the Fed signalling the possibility of decelerating its tightening pace from December onwards, there is a good chance that markets will extrapolate this from today’s data. A reading in line with consensus should further strengthen expectations for a 50bp hike in December, which is what the market is currently leaning towards, with a 57bp increase discounted in the OIS forwards. The cautionary tale is that inflation data has had a habit of surprising with higher readings. Markets have been trading stronger going into today’s reading with 10Y Treasury yields dipping towards 4.05% yesterday, which could increase the impact of a disappointing inflation reading. However, we have the feeling that the market may still be too absorbed with the notion of a potential pivot. There are good reasons to slow the pace of tightening not least given policy lags involved after a phase of catching up. That does not mean that the Fed will want to signal that it is doing less tightening in sum. This should not be the case unless there is more compelling evidence of inflation being on a trajectory to return to target.       US yields off their highs means a high CPI would be most impactful for markets Source:Refinitiv, ING ECB sticks with hawkish tones The European Central Bank has shown its willingness to keep its hawkish stance even in light of growth risks. At the hawkish end, Belgium’s Pierre Wunsch stated the ECB may need to hike more than markets expect if the economic downturn remained mild. Such hawkish signalling might be motivated by real rates having failed to rebound from their late October slump. The ECB’s consumer expectations survey contained little to cheer about for the ECB To be sure, the ECB’s consumer expectations survey contained little to cheer about for the ECB and its efforts to tackle inflation. Near-term price expectations over the 12-month horizon increased a little to 5.1%, while longer run inflation expectations over the 3-year horizon remained unchanged at 3%. Uncertainty over the outlook remained elevated. At the same time expectations of economic growth deteriorated markedly. The fall in real rate is a concern with inflation expectations rising Source: Refinitiv, ING Today's events and market view Rates markets appear to be trading on the front foot going into today's US CPI report. But the backdrop is still one where the appetite to take on duration risk appears to be limited. At least this is what the disappointing metrics of yesterday's 10Y US Treasuty auction suggest and we think the risks are skewed towards a larger move on the back of a disappointing inflation reading. Note that today the US Treasury will also follow up with a 30Y auction, and such long duration supply could well extend a push towards higher yields. A number of Fed officials are scheduled to speak after the CPI release, including the Fed's Daly, Mester and George. Other US data to watch are the initial jobless claims that should still point to a relatively robust labour market. In the eurozone the focus should be on ECB comments with Isabel Schnabel scheduled to speak in the afternoon. TagsRates Daily
The Commodities Digest: US Crude Oil Inventories Decline Amidst Growing Supply Risks

Inflation Running Well Above The Fed’s Desired Level

ING Economics ING Economics 12.11.2022 08:01
Primed for pivot, the market has rallied on the US CPI surprise. Fed officials have started to push back against the premature easing of financial conditions, but timing is especially inconvenient for the European Central Bank, which is still seeing greater risk of deanchoring inflation expectations  In this article Market runs with the CPI and is tailed by the Fed's hawks Spill-over of easing financial conditions comes at an inconvenient time for the ECB More signs that collateral scarcity is also on the ECB's mind Today’s events and market views We have published our Rates Outlook 2023: Belt up, we are going down: After a horrific 2022, bond markets can look forward to improving returns helped by a higher starting running yield, and subsequent falls in market rates. Brace for a reduction in central bank liquidity, more bonds supply and lingering systemic concerns as key themes, too.   Market runs with the CPI and is tailed by the Fed's hawks For once the US CPI release broke with the bad habit of surprising to the upside. And the market was quick to jump on the ‘pivot’-bandwagon, with a larger Fed hike of 75bp for December now seen off the table, and if anything it now seems that the market is shifting to discussing whether it could be 25bp rather than 50bp next month. The terminal rate that the Fed is seen reaching has slipped to 4.87%. Just after the last Fed meeting this had stood as high as 5.15%. Risk assets rallied on the prospect of slowing inflation and the Fed turning less aggressive.  At first Fed officials were quick to push back against the markets optimism The first Fed officials were quick to push back against the markets optimism. The data was better than expected, yet it is but one reading and the month-on-month core rate of 0.3% is still signaling inflation running well above the Fed’s desired level. While encouraged by the data the Fed’s Mester still saw greater risk in tightening too little than too much, Logan and George reiterated  that the Fed had more work to do. While the Fed may well move on to a slower pace of tightening also to better assess the impact of previous rapid rate increases, it may not want to signal that it is doing less overall. In fact, rallying equity markets and lower market yields easing financial conditions is probably not what it wants to see at this stage already without having more clarity where inflation is actually headed. The lower CPI print was greeted by lower nominal and real yields Source: Refinitiv, ING Spill-over of easing financial conditions comes at an inconvenient time for the ECB The read across from US markets saw the 10Y Bund yield falling to 2%, coincidentally the lowest level since just after the October ECB meeting. Terminal rate pricing for the ECB also slipped to 2.87% from above 3% previously. The ECB, however, does not even have the comfort of having at least one set of encouraging data with regards to inflation that could justify easing financial conditions, which may explain why we have had the ECB hawks becoming more vocal yesterday. We had highlighted the ECB’s consumer survey pointing to elevated if not slightly higher inflation expectations. The ECB’s Schnabel picked up on the higher persistence of inflation in her talk yesterday, while pointing out that the risk of inflation expectations deanchoring remains. There is no time for complacency and rates will likely have to move into restrictive territory to rein in inflation. Neutral won't cut it, even as the probability of a recession in the euro area increases. More signs that collateral scarcity is also on the ECB's mind On a more technical matter concerning collateral scarcity, the ECB announced yesterday that it was raising its limit of lending against cash collateral from €150bn to €250bn. Schnabel commented in a tweet that this was a precautionary measure ahead of year-end. Indeed when looking at the daily data through September, daily lending against cash never exceeded €100bn, which should be testament to the rather expensive conditions of this facility. But markets are also going into the upcoming year-end from an already much more strained starting point, so this increased backstop should be taken as a positive signal and further acknowledgement that the ECB is heeding market concerns. Daily ECB securities lending has not run into its cap Source: ECB, ING Today’s events and market views The post CPI gains in bond markets may persist for a while despite some pushback from Fed officials. The US holidays might induce some calm into overall markets allowing also risk assets to bask in the sentiment lift from improving inflation for a little while. Alongside positive news out of China that could limite the further downside in rates. This is not without risks, though. Today will still see the University of Michigan consumer confidence including its measure of surveyed inflation expectations. Longer run expectations are seen stable, while shorter run 1Y inflation expectations are seen ticking up a tad. In the eurozone we will see another busy slate of ECB speakers, though this time around with representatives from both ends of the dove-hawk spectrum. Among others look out for Holzmann, Lane, Panetta and de Guindos. Also keep an eye on the release of the European Commission economic forecasts. In primary markets Italy will be active auctioning a new 7Y bonds and tapping a 3Y bond as well as a 12Y green bond, in total for up to €8.75bn.      TagsRates Daily Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
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Craig Erlam Craig Erlam 12.11.2022 08:29
US After a round of soft inflation data triggered a buy-everything relief rally, Wall Street will focus on Fed speak and a plethora of data points that might show the economy remains resilient.  The key economic readings include manufacturing activity, retail sales, and housing data. There will be no shortage of appearances by the Fed this week. Brainard and Williams speak on Monday, while Tuesday includes speeches by Harker, Cook, and Barr. Wednesday brings Williams, Barr, and Waller, and on Thursday we will hear from Bullard, Bowman, Mester, Jefferson, and Kashkari. In addition to a swathe of economic releases, traders will also closely monitor big retail earnings from Walmart, Target, Macy’s, and Kohl’s. We should learn more about the health of the consumer and if we should expect a further easing of prices as we enter the holiday season. EU  It’s a relatively quiet week for the EU with the two standout economic releases being flash GDP and final HICP. With the economy facing a recession, the GDP data will be an interesting insight into how quickly growth is slowing going into an uncertain winter. The inflation data will naturally be of interest but it may take a significant revision to really grab investors’ attention. UK The Autumn statement has been a long time coming, it feels. The markets have calmed down a lot since the ridiculous mini-budget but it will still take time for the government to regain credibility and the confidence of the markets. It starts next week and all eyes will be on Parliament as we learn how the new government plans to balance the books while not piling more misery on the economy. The BoE monetary policy report hearing next week is another highlight but there’s also a lot of economic data due. The path for interest rates remains uncertain so it’s not just what policymakers have to say that matters, it’s whether the data allows them to slow the pace of tightening going forward as they so clearly want to do. CPI on Thursday is the obvious highlight but there’s plenty more throughout the week. Russia A quiet week with no economic data of note. South Africa Another quiet week with the only economic release being retail sales on Wednesday. Turkey No major economic releases next week, with investors still focused on the central bank and inflation. Switzerland Tier three data dominate next week. Focus remains on what the SNB will do in December, with Chair Jordan acknowledging on Friday that monetary policy isn’t restrictive enough to bring inflation back into the range of price stability over the medium term. The risk of a pre-meeting rate hike remains. China Weeks of speculation around China’s commitment to its zero-Covid policy have spurred a recovery in local stocks and we may be about to get more information on what that will entail. A relaxation of quarantine measures has been announced in recent days and a press briefing is now reportedly scheduled for Saturday. At the same time, China is seeing a steady rise in Covid cases resulting in more restrictions and mass testing.  China’s October retail sales, industrial production, and investment data will be released next week.  The PBOC is also expected to keep its one-year medium-term lending facility rate at 2.75% in November.   India A key inflation report could show pricing pressures are easing which might allow the RBI to be less aggressive with its tightening path.  Headline inflation is expected to ease from 7.4% to 6.7%.    Australia & New Zealand The focus for both Australia and New Zealand might stay on China and their weakening outlook due to their struggles with COVID.  Australian employment data is expected to show job growth continues, while unemployment remains at 3.5%. Wage pressures in the third quarter are expected to rise, but some of that is attributed to the increase in the minimum wage.    In New Zealand house sales data and producer prices will be released. Japan Japan’s third-quarter GDP reading is expected to show significant weakness as import costs skyrocketed.  Japan’s core inflation is also expected to surge from 3.0% to 3.5%, which should clearly weigh on consumer spending.  Given the weakness in the US dollar, the BOJ might save its ammunition and hold off intervening anymore in the foreign exchange market. Singapore It is expected to be a quiet week with the exception of non-oil domestic export data.   Economic Calendar Sunday, Nov. 13 Economic Data/Events China medium-term lending The ASEAN summit concludes in Cambodia. Monday, Nov. 14 Economic Data/Events Eurozone industrial production India trade, CPI, wholesale prices New Zealand performance services index Fed’s Williams moderates a panel at the Economic Club of New York ECB’s Fabio Panetta speaks in Florence ECB’s de Guindos speaks in Frankfurt. BOJ announces the outright purchase amount of Japanese government securities Tuesday, Nov. 15 Economic Data/Events US empire manufacturing, PPI France CPI Poland CPI  Eurozone GDP Hungary GDP Canada existing home sales China retail sales, industrial production, surveyed jobless France unemployment Germany ZEW survey expectations Japan industrial production, GDP Mexico international reserves New Zealand home sales, net migration South Korea export/import price index, money supply UK jobless claims, unemployment G-20 summit in Bali IEA monthly oil market report ECB’s Elderson speaks Fed’s Harker speaks at GIC Annual Monetary & Trade Conference Former US President Trump is due to make an announcement in Florida RBA releases minutes of its November interest rate meeting Wednesday, Nov. 16 Economic Data/Events US business inventories, cross-border investment, retail sales, industrial production Australia leading index Canada CPI, housing starts China property prices Israel GDP Italy CPI Japan machinery orders, tertiary index, department store sales Philippines Bloomberg economic survey Russia GDP South Africa retail sales UK CPI EIA crude oil inventory report G-20 summit in Bali BOE Gov Bailey appears before the Treasury committee   Fed’s Williams and Brainard, SEC’s Gensler speak at the 2022 Treasury Market conference ECB Financial Stability Review ECB President Lagarde speaks ECB’s Fabio Panetta speaks Thursday, Nov. 17 Economic Data/Events US housing starts, initial jobless claims Italy trade Singapore trade Australia unemployment China Swift payments Eurozone CPI, new car registrations Hong Kong jobless rate Japan exports, trade balance New Zealand PPI Singapore non-oil exports UK fiscal statement, economic forecasts Fed’s Kashkari and Jefferson speak at the Federal Reserve Bank of Minneapolis Fall Institute Research Conference Fed’s Mester speaks at the Federal Reserve Bank of Cleveland and the Office of Financial Research Annual Financial Stability Conference Fed’s Evans speaks ahead of his retirement BOE’s Silvana Tenreyro speaks SNB’s Maechler speaks at Money Market Event in Geneva BOE’s Huw Pill speaks at the Bristol Festival of Economics on ‘What Next for Central Banks’ Friday, Nov. 18 Economic Data/Events US Conference Board leading index, existing home sales Norway GDP Japan CPI Thailand foreign reserves, forward contracts, car sales ECB President Lagarde, Nagel, and Knot speak alongside BOE’s Mann Fed’s Collins speaks at the Federal Reserve Bank of Boston Economic Conference BOE’s Jonathan Haskel speaks Sovereign Rating Updates Italy (Fitch) Sweden (Fitch) Turkey (Fitch) Ireland (S&P) South Africa (S&P) Portugal (Moody’s) South Africa (Moody’s) Denmark (DBRS) This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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