Oct 24, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
With the exception of the Japanese yen, major currencies are relatively calm at the start of the new week as investors get ready for this week’s highly anticipated central bank decisions. US stock index futures trade in a flat manner for the day, and the US Dollar Index oscillates between 112.00 and 112.
Germany, the euro area, the UK, and the US will all receive the preliminary October Manufacturing and Services PMI statistics from S&P Global. Later in the day, observers will also be keeping an eye on the National Activity Index published by the Federal Reserve Bank of Chicago.
China’s GDP increased at an annualized pace of 3.9% in the third quarter, according to figures released during Asian trading hours. This reading exceeded the market expectation of a 3.4% expansion. However, compared to last year, retail sales in China increased by 2.5%, less than analysts had predicted they would increase by 3.3%. Following conflicting data, the Shanghai Composite dropped precipitously, shedding more than 2% per day at its lowest point.
Early on Monday, the USD/JPY pair rose toward 150.00 during the first few hours of trading before losing more than 400 pips in just 10 minutes. Masato Kanda, Japan’s senior currency diplomat, reaffirmed that they will continue to take appropriate action against excessive, disorderly market fluctuations without saying specifically whether they participated in the market. After experiencing a strong loss throughout the Asian session, the pair recovered to a level at 149.00, where it is currently up about 1% for the day.
Following Friday’s recovery, EUR/USD is currently trading in a fairly narrow range in mid-0.9800s. In early October, it is anticipated that manufacturing activity would continue to decline in both the euro area and Germany.
Early on Monday morning in Europe, GBP/USD is trading in the green and moving in the direction of 1.1400. Boris Johnson, a former British prime minister, declared that his bid to succeed Liz Truss was over. Prior to Monday’s nomination deadline, former chancellor Rishi Sunak is still the overwhelming favorite to succeed David Cameron as prime minister, according to reports.
Gold rose to a new 10-day high near $1,670 early on Monday after an astonishing leap on Friday, but it had difficulty keeping its positive traction. XAU/USD was trading at $1,657 at the time of publication, barely moving from the previous day. The 10-year US Treasury bond yield is currently down nearly 2% on the day, which has helped gold maintain its current level.
On Sunday, Bitcoin rose toward $20,000 but lost momentum before doing so. BTC/USD was trading at $19,350 at the time of writing, down 1% on the day. In the end, Ethereum gained more than 4% last week, and as of early Monday, it appears to have entered a pullback above $1,300.
