FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 20 October 2022

20 Oct 2022

Dollar fuels higher Treasury yields

Asia stocks fell on Thursday. The Shanghai Composite is up 0.33% at 3,054.57. Overall, the Singapore MSCI is down 0.92% at 268.35. Over in Hong Kong, the Hang Seng Index is down 1.54% at 16,253.00. In Japan, the Nikkei 225 is down 0.73% at 27,030.00, while the Topix index is down 0.37% at 1896.50. South Korea’s Kospi is down 0.99% at 2,215.23. Australia S&P/ASX 200 down 1.02% at 6730.70.

Top News of the Day:

The dollar loomed over major peers on Thursday as Treasury yields peaked at multi-year highs, while the yen slid to a fresh 32-year low and kept markets on high alert for any signs of an intervention.

The surging greenback also pushed the Chinese offshore yuan to a record low in Asia, though it later trimmed intraday losses on a report of a potential reduction in COVID quarantine time for visitors.

Market Summary as per 19/10/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded down 0.19% at 12,741.41, CAC 40 futures down 0.43% at 6040.72 and the UK 100 futures contract in the U.K. down 0.17% at 6924.98.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 0.33% at 30423.82. The S&P 500 down 0.67% at 3695.15 and the Nasdaq 100 down 0.40% at 11103.38, NYSE closes down 1.01% at 13947.26.

Top Market News Today:

In the Forex market, GBPUSD down 0.03% at 1.1211. The USDJPY up 0.07% at 149.954. The USDCHF up 0.11% at 1.0046. EURUSD up 0.11% at 0.9783, EUR/GBP up 0.16% at 0.8722. The USD/CNY up 0.06% at 7.2321 at the time of writing.

In the Commodity market U.S. Gold futures up 0.15% at $1,631.47. Elsewhere, Silver futures up 0.09% at $18.450 per ounce, Platinum up 0.11% at $883.50 per ounce, and Palladium up 0.20% at $2000.50.

Crude Oil up on Thursday; Brent Crude Oil up 0.69% at $93.17 per barrel while U.S. West Texas Intermediate (CLc1) up 1.03% at $85.44.

In the Cryptocurrency Markets, Bitcoin at 19126.00 up 0.01%, Ethereum down 0.35% at 1290.50, Litecoin at 51.69 up 1.21%, at the time of writing.

Top Market Segment to Watch Out Today:

GOLD: Gold prices fell to an over three-week low on Thursday as expectations of more Federal Reserve interest rate hikes pushed up U.S. Treasury yields and caused a steep selloff in metal markets.

A strong outlook for the dollar pressured bullion prices, while rising interest rates drove up the opportunity cost of holding gold – a trend that has weighed heavily on prices this year.

Economic News:

US: A federal appeals court ruled on Wednesday that the U.S. Consumer Financial Protection Bureau’s funding apparatus is unconstitutional, faulting a system Democrats designed to insulate the agency from requiring congressional appropriations.

The New Orleans-based 5th U.S. Circuit Court of Appeals ruled that the CFPB’s independent funding through the Federal Reserve rather than budgets passed by Congress violated the separation of powers principles in the U.S. Constitution.

That ruling, by a panel of three judges appointed by then-President Donald Trump, a Republican, in the process vacated a 2017 regulation the agency adopted aimed at combating “unfair and abusive” practices in the payday lending industry.

The Community Financial Services Association of America sued in 2018 to challenge the rule, which barred lenders from making a new attempt to withdraw funds from an account where two consecutive attempts had failed unless consumers consented.

Euro Zone: Britain’s interior minister quit on Wednesday with a broadside at Liz Truss before her lawmakers openly quarrelled in parliament, underscoring the erosion of the prime minister’s authority after just weeks in the job.

The departure of Suella Braverman, over a “technical” breach of government rules, means Truss has now lost two of her most senior ministers in less than a week, both replaced by politicians who had not backed her for the leadership.

Hours after the resignation, lawmakers openly rowed and jostled amid confusion over whether a vote on fracking was a confidence vote in her administration.

Opposition parliamentarians complained that Truss’s politicians were being manhandled to make them vote with the government, though two lawmakers from her Conservative party said they had not seen any such behaviour.

Top Economic Releases Today:

U.S. Initial Jobless Claims today at 08:30 this time estimated 230K, previously which was 228K.
45 previously which was -12,280M.
JAPAN National Core CPI (YoY) (Sep) today at 19:30 this time estimated 3.0%, previously which was 2.8%.

RUSSIA Central Bank reserves (USD) today at 09:00 previously which was 548.7B.
GERMANY PPI (MoM) (Sep) today at 02:00 this time estimated 1.3%, previously which was 7.9%.