Market Considerations and Analytics

Key Notes

• After the US Dollar started to strengthen again, the Japanese Yen slowly declined.
• Despite fears of an impending recession, central banks continue to tighten.

Despite Japan’s GDP narrowly exceeding expectations thus far today, the yen has weakened a little bit. Rather than the expected -1.1%, the third quarter’s annualized GDP was -.08%.

After falling by around a dozen basis points throughout the curve yesterday, Treasury rates have risen by a few bps so far today. 40-year record inversion of -0.84% for the 2s 10s

With the exception of Hong Kong and mainland China, APAC equities declined following a soft lead from Wall Street. Today, there are further rumors that China would abandon its extremely onerous Covid-19 zero-case policy.

After falling in North American trade, the US dollar is often stronger during the Asian session. After comments this week from numerous prominent finance executives raising the alarm about an economic downturn in 2023, fears of a recession in the US have continued to grow.

Their synchronized utterances appear to have given their viewpoint more credibility.

Although the Bank of Canada boosting its cash rate by 50 basis points to 4.25% as expected overnight, the Canadian Dollar is down again. Nearly 1.3700 has been reached as just one high for USD/CAD.

TECHNICAL ANALYTICS OF USD/JPY

After reaching a high of 137.86, USD/JPY attempted to move above the threshold of 137.67 but was unable to continue the uptrend. These levels can still present resistance.

Resistance may be found higher, near the previous maxima of 139.90 and 142.25.

The preceding lows and breaking-points of 133.63, 131.74, 131.50, 131.35, and 131.26 may provide support on the downwards.

Exponential Moving Averages – Daily