- The USD Index dived to a six-month low of 103.50, from 105.00 following the cooler CPI data and trades at 104.00 now. US Stocks rallied on open as high as +3.85% but lost most of their gains by close (+0.30-1.01%). Yields tanked (10-yr lost 11 bp) as Treasuries rallied but closed at 3.501%. Commodities rallied (Gold & Copper hit 6-mth highs), Asian markets remain bid , while the USD was 1.5% vs Yen, and hit 6-mth lows vs Euro, Sterling & Kiwi and 3-mths lows vs. Aussie. BTC spiked to 18k before news that Binance withdrawals had hit $1.9 bln in 24 hours.
UK CPI also weakened (10.7% vs 10.9% & 11.1% last month) more than expected but the wider RPI (which is what many wage settlements use and is a cause of the widespread strike action) dipped but was hotter than expected at 14%. - EUR – rotates over 1.0600 at 1.0625 now, ahead of ECB on Thursday.
- JPY – sank to 134.60 lows from over 137.70 yesterday and 150.00 in late October. Strong Tankan data and Machinery Orders help JPY strength.
- GBP – Sterling rallied over 1.2400, and trades at 1.2350 following good Inflation data and ahead of an expected 50 bp rate hike from the BoE tomorrow.
- Stocks – Wall Street rallied closed higher again yesterday but gave up most of their opening gains. – US500 +29 (+0.73%) 4019, and retakes 4000. Big movers included MRNA +19.63%, META +4.74%, GOOGL & AMZN +2.5%. FUTS trades at 4029 now.
- USOil – Rallied to $76.00 and trades at the key $75.00 now after a surprise build in US crude inventories against forecasts of a decline.
- Gold – Spiked as high as $1824.45 and trades at $1808. Can the $1800 handle hold?
- BTC – Sentiment woes continue from Binance & SBF but the weaker USD saw a peak over $18k, before a crash to 17.3k and bounce to 17.7k now. More FTX collapse fallout – Canada bans crypto leverage, crypto margin trading.
Today – “nothing else matters” FOMC Policy Decision & Press Conference. Before that – EZ Ind. Prod., US Export/Import Prices, NZD GDP. Speech from ECB’s Elderson.
Biggest FX Mover @ (07:30 GMT) NZDJPY (-0.37%) fell from highs over 88.00 yesterday to test the 87.00 zone today. MAs aligned lower, MACD histogram & signal line negative and falling. RSI 38.10 & falling, H1 ATR 0.163, Daily ATR 0.879.
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Stuart Cowell
Head Market Analyst
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