FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 17 October 2022

17 Oct 2022

U.K. to BRING Tax/Spending Plans

Asia Pacific markets slipped on Monday. The Shanghai Composite is up 0.17% at 3,077.07. Overall, the Singapore MSCI is down 1.43% at 268.35. Over in Hong Kong, the Hang Seng Index is down 0.54% at 16,510.00. In Japan, the Nikkei 225 is down 1.11% at 26,750.00, while the Topix index is down 0.69% at 1879.00. South Korea’s Kospi is up 0.37% at 2,220.65. Australia S&P/ASX 200 down 1.40% at 6664.40.

Top News of the Day:

European stock markets are expected to open marginally higher Monday, helped by plans by the U.K. government to shore up confidence in its fiscal policies after weeks of turmoil.

New British finance minister Jeremy Hunt will announce tax and spending measures later Monday, two weeks earlier than previously scheduled, after the original economic plan put forward by Prime Minister Liz Truss and former Chancellor Kwasi Kwarteng roiled financial markets.

Market Summary as per 14/10/2022:

European equities Friday closing. The DAX futures contract in Germany traded up 0.67% at 12,437.81, CAC 40 futures up 0.90% at 5931.93 and the UK 100 futures contract in the U.K. up 0.12% at 6858.80.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 1.34% at 29634.84. The S&P 500 down 2.37% at 3583.08 and the Nasdaq 100 down 3.10% at 10692.06, NYSE closes down 2.03% at 13607.30.

Top Market News Today:

In the Forex market, GBPUSD up 0.95% at 1.1283. The USDJPY down 0.02% at 148.703. The USDCHF down 0.34% at 1.0020. EURUSD up 0.35% at 0.9752, EUR/GBP down 0.67% at 0.8644. The USD/CNY up 0.11% at 7.1980 at the time of writing.

In the Commodity market U.S. Gold futures up 0.60% at $1,653.74. Elsewhere, Silver futures up 1.33% at $18.485 per ounce, Platinum up 0.65% at $906.50 per ounce, and Palladium up 1.94% at $2027.50.

Crude Oil up on Monday; Brent Crude Oil up 0.75% at $92.31 per barrel while U.S. West Texas Intermediate (CLc1) up 0.83% at $85.24.

In the Cryptocurrency Markets, Bitcoin at 19200.00 up 0.47%, Ethereum up 0.19% at 1308.60, Litecoin at 51.53 up 0.04%, at the time of writing.

Top Market Segment to Watch Out Today:

CRUDE OIL: Oil prices rose on Monday, recovering some of last week’s losses as more OPEC+ members expressed support for a recent production cut of over 2 million barrels per day, despite increased opposition from the United States.

Economic News:

US: U.S. President Joe Biden on Saturday criticized British Prime Minister Liz Truss’s original economic plan as a mistake and said he was not concerned about the strength of the soaring U.S. dollar.

Truss on Friday fired her finance minister Kwasi Kwarteng and scrapped parts of their economic package after it sparked financial market turmoil, including a steep dive in the value of the pound.

Biden, a Democrat, frequently criticizes conservative “trickle down” economic policies, associated in the United States with former President Ronald Reagan and Republicans.

His White House, though, had previously declined to comment on the Truss plan, which initially foresaw scrapping Britain’s 45% top income tax rate.

Earlier on Saturday Britain’s new finance minister Jeremy Hunt said some of the country’s taxes would go up and tough spending decisions were needed, saying Truss had made mistakes as she battles to keep her job just over a month into her term.

Euro Zone: New British finance minister Jeremy Hunt will announce tax and spending measures on Monday, two weeks earlier than scheduled, as he tries to stem a loss of confidence in the government’s fiscal plans.

“The Chancellor will make a statement later today, bringing forward measures from the Medium-Term Fiscal Plan that will support fiscal sustainability,” the finance ministry said. “He will also make a statement in the House of Commons this afternoon.”

Hunt met Prime Minister Liz Truss over the weekend to overhaul economic proposals that triggered a slump in the value of the pound and British government bonds when they were announced on Sept. 23.

Hunt will deliver a fuller medium-term fiscal plan as scheduled on Oct. 31 alongside forecasts from the independent Office for Budget Responsibility, the Treasury said.

Hunt met Bank of England Governor Andrew Bailey and the head of Britain’s Debt Management Office late on Sunday to brief them on his plans, the Treasury said.

Top Economic Releases Today:

JAPAN Tertiary Industry Activity Index (MoM) today at 00:30 this time estimated 0.30%, previously which was -0.50%.
00 this time estimated 81.00B, previously which was 79.39B.
NEW ZEALAND CPI (QoQ) (Q3) today at 17:45 this time estimated 1.6%, previously which was 1.7%.