- USDIndex – Held 113.00 yesterday and again tested 113.44. Yields cooled from recent highs. (US 10yr at 3.902%). US PPI was hotter than expected (0.4% vs 0.2% & -0.1% prior). FOMC Mins. less Hawkish than many anticipated but far from indicating a pivot anytime soon. “Participants judged that a softening in the labor market would be needed to ease upward pressures on wages and prices.” and “emphasized the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action.”
- The UK’s new fiscal policy remains squarely under threat and the BOE’s Bond-Buying, beyond Friday is still being questioned despite BOE denials. Sterling recovered yesterday but Gilts remain very fragile. US Stocks closed flat, Asian markets lower (Hang Seng -1.13%) & European FUTS also flat.
- EUR – rotates through 0.9700, up from 0.9670 lows but unable to hold over 0.9720.
- JPY – rallied through 146.00 to new 24-year highs yesterday within a few pips of 147.00. 146.85 now.
- GBP – Sterling rallied from a new 11-day low at 1.0923 over 1.1000 to 1.1075. Immense pressure on new PM Truss & Chancellor Kwarteng to reverse tax cuts or face a major rebellion.
- Stocks – US stocks, were mixed but biased lower on Wednesday and closed down US500 -033%, -11.81 at 3577. MRNA +8.28%, PEPSI +4.18%, VLO +5.02%. US500 FUTS trades at 3586 now.
- USOil – declined again on global recession worries into $86.25, back to $87.15 now.
- Gold – remained range bound between $1665 support zone and $1675. Trades at $1668 now but remains pressured.
- BTC – also weighed by weak sentiment and a strong USD sank to $18.8K yesterday trades at $19.1k now.
Today – German HICP confirmed at record 10.9% US CPI, US DoE, IEA OMR, Speeches from ECB’s de Guindos & BOE’s Mann.
Biggest FX Mover @ (06:30 GMT) GBPJPY (-0.30%) rallied from sub 160.00 lows yesterday to 163.25 highs today, before declining into 162.50. MAs declining now, MACD histogram & signal line positive but starting to decline, RSI 54.40 & declining, H1 ATR 0.305, Daily ATR 3.201.
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Stuart Cowell
Head Market Analyst
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