FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT

12 Oct

FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 12 October 2022

/ CSFX Analytics

BoE signals TO extend bond purchases

Asia Pacific wallowed at two-year lows on Wednesday. The Shanghai Composite is up 0.40% at 2,991.34. Overall, the Singapore MSCI is down 0.48% at 278.35. Over in Hong Kong, the Hang Seng Index is down 0.84% at 16,690.00. In Japan, the Nikkei 225 is down 0.04% at 26,420.00, while the Topix index is flat at 1871.00. South Korea’s Kospi is up 0.50% at 2,203.10. Australia S&P/ASX 200 up 0.04% at 6647.50.

Top News of the Day:

The Bank of England has signalled privately to lenders that it was prepared to extend its emergency bond-buying programme beyond Friday’s deadline if market conditions demanded it, the Financial Times said, citing three sources.

Wednesday’s report comes a day after the British central bank’s governor, Andrew Bailey, said he had no intention of extending purchases of bonds beyond the deadline.

Market Summary as per 11/10/2022:

European equities Tuesday closing. The DAX futures contract in Germany traded down 0.43% at 12,220.25, CAC 40 futures down 0.13% at 5833.21 and the UK 100 futures contract in the U.K. down 1.06% at 6885.24.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.12% at 29239.20. The S&P 500 down 0.65% at 3588.83 and the Nasdaq 100 down 1.24% at 10791.35, NYSE closes down 0.62% at 13608.08.

Top Market News Today:

In the Forex market, GBPUSD up 0.36% at 1.1000. The USDJPY up 0.23% at 146.167. The USDCHF down 0.16% at 0.9952. EURUSD up 0.18% at 0.9722, EUR/GBP flat at 0.8843. The USD/CNY down 0.09% at 7.1595 at the time of writing.

In the Commodity market U.S. Gold futures up 0.32% at $1,671.11. Elsewhere, Silver futures up 0.52% at $19.240 per ounce, Platinum up 0.32% at $897.84 per ounce, and Palladium up 1.41% at $2152.50.

Crude Oil up on Wednesday; Brent Crude Oil up 0.83% at $94.53 per barrel while U.S. West Texas Intermediate (CLc1) up 0.98% at $88.24.

In the Cryptocurrency Markets, Bitcoin at 19065.00 up 0.87%, Ethereum up 1.05% at 1293.50, Litecoin at 52.44 up 0.81%, at the time of writing.

Top Market Segment to Watch Out Today:

Toyota Motor Corp.: Toyota Motor Corp said on Wednesday it has begun assembling cars at a new plant in Myanmar whose start was put on hold for more than 19 months after a military coup and during the coronavirus pandemic.

The Japanese automaker said the plant, which is opening even as other companies have pulled out of the country, has begun to assemble one or two vehicles a day, working from parts kits shipped to Myanmar in September.

Economic News:

US: The U.S. is scrambling to tackle unintended consequences of its new export curbs on China’s chip industry that could inadvertently harm the semiconductor supply chain, people familiar with the matter said.

By late Tuesday, hours before a new restriction took effect, South Korean memory chipmaker SK Hynix Inc said it got authorization from the United States to receive goods for its chip production facilities in China without additional licensing imposed by the new rules.

The Biden administration had planned to spare foreign companies operating in China such as SK Hynix and Samsung Electronics (OTC:SSNLF) Co from the brunt of new restrictions, but the rules published Friday did not exempt such firms.

As published, the rules require licenses before U.S. exports can be shipped to facilities with advanced chip production in China as part of a U.S. bid to slow China’s technological and military advances.

Euro Zone: The European Central Bank should start shrinking its balance sheet once its interest rate is close to 2%, first by getting banks to repay their loans and then by whittling down its bond holdings, ECB policymaker Francois Villeroy de Galhau said on Tuesday.

Trying to fight runaway prices, the ECB has raised its rate on bank deposits to 0.75%, promised more hikes and begun a debate about mopping up excess liquidity from the banking system – legacy of its fight against deflation in the last decade.

Villeroy said it was too early to say whether the ECB should raise that rate by 50 or 75 basis points at its Oct. 27 meeting.

But he reaffirmed the rate should be at its neutral level — or “a bit less than 2%” — before the end of the year, paving the way for the ECB to shrink its balance sheet.

Then Villeroy said the ECB could begin not replacing some of the maturing bonds that it has bought under its 3.3 trillion-euro ($3.20 trillion) Asset Purchase Programme during the last seven years – when inflation was too low.

Top Economic Releases Today:

U.K. GDP (MoM) today at 02:00 this time estimated 0.00%, previously which was 0.20%.
30 this time estimated 0.20%, previously which was -0.10%.
EURO ZONE ECB President Lagarde Speaks today at 09:30.

JAPAN PPI (YoY) (Sep) today at 19:50 this time estimated 8.8%, previously which was 9.0%.
RUSSIA Trade Balance (Feb) today at 9:00 previously which was 21.17B.