Oct 11, 2022
VOT Research Desk
Key News – Insights and Analysis
The Market Perspective:
US bond markets resumed after a three-day weekend, and the yield on the 10-year benchmark increased toward 4%, supporting the dollar early on Tuesday. The US Dollar Index is currently trading at its best level in more than ten days above 113.20, further demonstrating how the risk-averse market environment is allowing the dollar to continue to outperform its competitors.
The US economic docket will include the NFIB Business Optimism Index and the IBD/TIPP Economic Optimism Index, but it’s probable that the market’s attitude will continue to have an impact on the movement of major currency pairs. Investors will also pay particular attention to central bankers’ speeches.
Wall Street’s primary indexes ended up finishing in the red on Monday despite light trading circumstances, just ahead of important third-quarter earnings reports from major financial companies like JPMorgan, Citi, and Wells Fargo. US stock index futures, which reflect investors’ cautious outlook, were last seen falling between 0.3% and 0.4%.
During the Asian trading session, data from Australia showed that while economic conditions improved somewhat in September, company confidence declined. After suffering significant losses on Monday, the AUD/USD pair pushed lower and was last seen trading at 0.6260, its lowest level since April 2020, shedding more than 0.6% daily.
The euro area’s common currency shown some resistance versus the dollar in the second half of the day on Monday, according to reports that Germany was open to the notion of joint EU debt to address the energy problem. German officials denied these reports, which caused the EUR/USD to decline and experience daily losses. Around the time of publication, the pair is oscillating at about 0.9700.
Although the Bank of England (BOE) is introducing new policies to enhance market conditions, the British pound is struggling to find buyers. In the meantime, data released by the UK’s Office for National Statistics earlier in the day showed that the ILO Unemployment Rate decreased from 3.6% to 3.5% in the three months leading up to August. As anticipated, the Claimant Count Rate maintained at 3.9%, while the Average Earnings Including Bonus increased by 5% from 5.5% in July. At 1.1000, GBP/USD was last observed down 0.5% for the day.
The USD/JPY exchange rate remains above 145.50 and close to the level that led to a Bank of Japan (BoJ) intervention in late September. The BoJ needs to maintain its lax policy until salaries rise, according to comments made earlier in the day by the prime minister of Japan, Fumio Kishida, who also urged businesses to raise pay at the same time as prices.
Following the precious metal’s break below $1,700 at the start of the week, the bearish trend surrounding Gold grew stronger. Bitcoin fell about 2% on Monday and was last seen at around $19,000 early on Tuesday. XAU/USD lost 1.5% on Monday. Ethereum dropped below $1,300 and last traded at $1,280, down 0.6% on the day. moving erratically in a small channel just below $1,670.
