Sep 29, 2022 5:09 PM +05:00
VOT Research Desk
Key Insights – U.S Morning Rundown
In September, German inflation reaches double digits.
In October, hawkish ECB speakers anticipate a 75 basis point increase.
Inflation in Germany rose to 10% in September, easily surpassing market expectations and the print from last month. The German government’s three-month rail subsidies ran out this month, driving up transportation costs. In addition, energy costs continue to rise.
The headline consumer confidence reading was confirmed at -28.8, the lowest since the series began, as the final Euro Area consumer confidence figures showed economic sentiment continuing to weaken.
Aggressive ECB The most recent round of speeches from members of the ECB now suggests that the rate will likely rise by 75 basis points next month and will likely rise multiple times over the next several meetings. Luis de Guindos, vice president of the ECB, stated today that the central bank must do whatever it takes to lower inflation, channeling his inner Mario Draghi, and that inflation remains very high and growth is slowing in the Euro Zone.Georg Muller, a member of the ECB council, demanded a significant rate increase today, while Gediminas Simkus, a board member, stated that he preferred a 75 basis point increase at the October meeting.
The regional German inflation data released earlier today helped support EUR/USD against yesterday’s high print.
There is still a group of old prints on either side of parity, which is likely to halt any upward movement of the single currency.
Data from retail traders indicate that 68.85% of traders are net-long, with a ratio of 2.21 to 1.The number of net-long traders is down 15.83 percent from yesterday and down 20.54 percent from last week, while the number of net-short traders is up 13.23 percent from yesterday and 12.90 percent from last week.
We typically view crowd sentiment in a contrarian manner, and the fact that traders are net-long EUR/USD indicates that prices may continue to fall. However, traders are net-longer than they were yesterday and last week. Despite traders remaining net-long, recent sentiment shifts indicate that the EUR/USD price trend may soon reverse and move higher.
