FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 18 October 2022

18 Oct 2022

Japan will respond decisively to excessive FX moves

Asia stocks nudged higher on Tuesday. The Shanghai Composite is up 0.32% at 3,094.73. Overall, the Singapore MSCI is up 1.06% at 271.50. Over in Hong Kong, the Hang Seng Index is up 1.41% at 16,800.00. In Japan, the Nikkei 225 is up 1.72% at 27,190.00, while the Topix index is up 1.41% at 1901.50. South Korea’s Kospi is up 1.00% at 2,241.93. Australia S&P/ASX 200 up 1.81% at 6785.20.

Top News of the Day:

Japanese Finance Minister Shunichi Suzuki warned on Tuesday Japan would take appropriate and decisive action against excessive currency moves driven by speculators, suggesting market intervention was possible after the yen fell to a fresh 32-year low.

Suzuki, speaking in parliament, pointed to Japan’s currency intervention last month when pressed by an opposition lawmaker on what a decisive response meant.

Market Summary as per 17/10/2022:

European equities Monday closing. The DAX futures contract in Germany traded up 1.70% at 12,649.03, CAC 40 futures up 1.83% at 6040.67 and the UK 100 futures contract in the U.K. up 0.90% at 6920.25.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 1.86% at 30185.83. The S&P 500 up 2.65% at 3677.94 and the Nasdaq 100 up 3.46% at 11062.53, NYSE closes up 2.32% at 13923.21.

Top Market News Today:

In the Forex market, GBPUSD up 0.20% at 1.1370. The USDJPY down 0.10% at 148.879. The USDCHF down 0.14% at 0.9937. EURUSD up 0.21% at 0.9856, EUR/GBP up 0.13% at 0.8669. The USD/CNY down 0.06% at 7.1905 at the time of writing.

In the Commodity market U.S. Gold futures up 0.49% at $1,658.03. Elsewhere, Silver futures up 0.99% at $18.807 per ounce, Platinum up 0.44% at $918.00 per ounce, and Palladium up 0.98% at $2017.50.

Crude Oil up on Tuesday; Brent Crude Oil up 0.32% at $92.18 per barrel while U.S. West Texas Intermediate (CLc1) up 0.45% at $85.02.

In the Cryptocurrency Markets, Bitcoin at 19560.00 up 0.23%, Ethereum up 0.05% at 1332.20, Litecoin at 51.81 down 0.19%, at the time of writing.

Top Market Segment to Watch Out Today:

Credit Suisse Group AG: Credit Suisse Group AG recently launched a process that could see its U.S. asset management arm sold, a source familiar with the matter said on Monday, as the troubled Swiss bank seeks to reshape its business after multiple scandals.

Initial expressions of interest from potential buyers are due in at the end of this week, said the source, who spoke on condition of anonymity to discuss private information. The source added there was no guarantee of a sale and Credit Suisse could ultimately retain the business.

Economic News:

US: A bipartisan group of lawmakers on Monday introduced legislation to strengthen the authority of the Federal Communications Commission to oversee foreign sponsorships of U.S. broadcast TV and radio programs.

Democratic Senator Brian Schatz, Republican Senator Marsha Blackburn and Representative Anna Eshoo, a Democrat, proposed giving the FCC authority to compel broadcasters to check foreign media databases to better identify groups sponsoring programming.

“Foreign governments shouldn’t be able to hide behind shell companies to fund misinformation and propaganda on American airwaves,” Schatz said.

Blackburn said foreign governments currently “can use shell companies to broadcast regime-funded propaganda across American airwaves. This legislation will protect consumer transparency by requiring the disclosure of foreign government-sponsored content.”

Euro Zone: The European Union should recognise China even more as a competitor and reduce its economic dependency, EU foreign policy chief Josep Borrell said on Monday, as the bloc looks to fine-tune relations with Beijing.

The European External Action Service, which Borrell heads, said in a five-page paper prepared for foreign ministers meeting in Luxembourg that the EU should pursue “realistic and robust engagement.”

The bloc has regarded China since 2019 as a partner, tough economic competitor and systemic rival. Borrell told reporters after Monday’s ministerial meeting that the role of competitor had become more central.

“The message from China now is one of competing,” he said, as well as China’s economic success and desire for influence in Africa, Asia, Latin America and elsewhere.

Europe should reduce its dependency by diversifying supply chains for technologies and critical raw materials and avoiding new vulnerabilities.

EU leaders are set to discuss relations with China at a two-day summit from Thursday, starting a process officials describe as a “fine-tuning” of ties.

Top Economic Releases Today:

U.S. Industrial Production (MoM) (Sep) today at 09:15 this time estimated 0.10%, previously which was -0.20%.
30 this time estimated 17.32B, previously which was 14.83B.
U.S. API Weekly Crude Oil Stock today at 16:30 previously which was 7.054M.

GERMANY ZEW Economic Sentiment (Oct) today at 05:00 this time estimated -65.70, previously which was -61.90.
NEW ZEALAND Global Dairy Trade Price Index today at 11:00 previously which was -3.50%.