VOT Research Desk
Market Analytics and Considerations
Early on Thursday, major currency pairs traded in tight ranges and investors remained cautious despite the apparent rise in geopolitical tensions. The 10-year yield on the US Treasury bond remains steady at around 3.7%, and the US Dollar Index remains above 106.00.
The final Core Harmonized Index of Consumer Prices (HICP) will be released by Eurostat in October, and British Chancellor Jeremy Hunt will present the Autumn Budget to parliament. The US economic docket will focus on October Housing Starts, Building Permits, and the weekly Initial Jobless Claims in the second half of the day. A number of FOMC policymakers will also give speeches in the second half of the day.
On Wednesday, safe-haven flows continued to dominate the financial markets despite the better-than-expected US Retail Sales data. Even though Wall Street’s main indexes went down after the opening bell, investors continued to price in a smaller rate increase in December, and the US Dollar struggled to take advantage of this.
The CME Group FedWatch Tool indicates that the probability of a 50 basis point increase by the Federal Reserve is currently 85 percent.
During the Asian exchanging hours, the information from Australia showed that the Joblessness Rate edged lower to 3.4% in October from 3.5% in September. This reading was higher than the 3.6% market expectation. Further subtleties of the positions report uncovered that Work Change was +32.2K, contrasted with examiners’ gauge of 15K. AUDUSD declined to the 0.6700 region with the underlying response however figured out how to eradicate a huge piece of its everyday misfortunes heading into the European meeting.
The anticipated Annual Consumer Price Index (CPI) remained unchanged at 6.9%, according to Statistics Canada’s report on Wednesday. The USDCAD did not respond immediately to the inflation data, but falling crude oil prices enabled the pair to close above 1.3300 in positive territory.At the hour of press, the pair was exchanging level on the day at around 1.3330.
Andrew Bailey, governor of the Bank of England (BOE), testified before the UK Treasury Select Committee that despite the fact that they were observing signs that supply chain shock was beginning to fade, they will likely continue to raise rates. GBPUSD ended up with modest daily gains on Wednesday before entering a consolidation phase on Thursday near 1.1900.In order to weather the economic storm, British Chancellor Jeremy Hunt stated that tax increases and spending reductions are required. In the Autumn Budget, Hunt is likely to announce a package of £25 billion in tax increases and £35 billion in spending cuts.
Early on Thursday, EURUSD remains quiet below 1.0400.Luis de Guindos, vice president of the European Central Bank (ECB), stated on Wednesday that “balance sheet reduction must be implemented with prudence” and that they planned to begin with passive quantitative tightening.
USDJPY is struggling with taking an unequivocal action in one or the other course and moving sideways in a thin reach beneath 140.00.Haruhiko Kuroda, governor of the Bank of Japan (BoJ), stated earlier in the day that “cost-push” factors would reduce CPI growth to below 2% in the following fiscal year.
Gold’s four-day winning streak came to an end on Wednesday, and it continued to fall early on Thursday. XAUUSD is trading below $1,770 as the yield on US 10-year T-bonds stays the same.
Ethereum is down more than one percent at around $1,200, while Bitcoin continues its sideways grind near $16,500.
