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Market Review 06-10-2021

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Forex Today: Energy crisis, higher yields lift dollar, ADP jobs, debt ceiling headlines eyed

Here is what you need to know on Wednesday, October 6:

The market mood has soured on Wednesday after a positive Tuesday. Surging energy costs and a break higher in US yields are hitting stocks bidding the dollar, even against the kiwi, where a rate hike failed to help. ADP’s jobs data is eyed after the upbeat ISM Services PMI. Debt ceiling and stimulus headlines are eyed. Cryptos are up, gold is stable.

Energy crisis: WTI Crude Oil tops $79, the highest since 2014 in another response to the OPEC+ decision to limit production increases and no surplus elsewhere. Natural gas prices extend their meteoric rise in Europe and threaten to cripple the recovery. Several European governments want to coordinate policy.

US 10-year Treasury yields have hit 1.57%, the highest since June, and that benefits the US dollar., alongside safe-haven flows.

EUR/USD has slipped back below 1.16 ahead of eurozone retail sales.

GBP//USD is struggling around 1.36 ahead of UK Prime Minister Boris Johnson’s speech on his vision for the country. The British army continues helping bring petrol to stations.

NZD/USD is trading around 0.6920, down amid greenback strength and despite a rate hike from the Reserve Bank of New Zealand. The RBNZ’s increase of borrowing costs from 0.25% to 0.50% was fully priced in, and the kiwi suffered from the bank’s signal of cautious moves down the road.

US data: The ISM Services Purchasing Managers’ Index for September surprised to the upside with 61.9 points and robust subcomponents. The news underpinned equities on Tuesday before the mood soured. The focus on Wednesday is ADP’s private-sector jobs report for September, which serves as a significant hint toward Friday’s Nonfarm Payrolls. Contrary to previous months, ADP’s statistics foresaw the broad trend last time.

US politics: The clock continues ticking toward the US hitting its debt ceiling in mid-October, and President Joe Biden floated the idea of ditching the Senate filibuster to break the deadlock, as Republicans remain reluctant to prevent a default on debt. Democrats continue clashing on the broad spending bill, with some reports it could come down from $3.5 to roughly $2 trillion.

Cryptocurrencies advanced on Wednesday, with Bitcoin jumping above $50,000 and changing hands at above $51,000 at the time of writing. Ethereum is hovering around $3,500 and Shiba Inu continues standing out after a tweet from Tesla’s Elon Musk earlier in the week.

Source:https://www.fxstreet.com/news/forex-today-energy-crisis-higher-yields-lift-dollar-adp-jobs-debt-ceiling-headlines-eyed-202110060607



According to Anil Panchal (Analyst at FXStreet – 3rd party source) the EURGBP is short positions below 0.8493 with target at 0.8477

Past performance is not a guarantee of future performance

Source:https://www.fxstreet.com/news/eur-gbp-price-analysis-rebound-remains-elusive-below-08530-202110060459

Number of Lots: Required Margin: Risk Management (50%): Potential Profit/Loss 0.8477
1 € 3,333.33 € 1,666.67 € 188.01
5 € 16,666.67 € 8,333.33 € 940.07
10 € 33,333.33 € 16,666.67 € 1,880.14
25 € 83,333.33 € 41,666.67 € 4,700.35
50 € 166,666.67 € 83,333.33 € 9,400.71

The above chart and any information provided therein are indicative and subjective to the technical analysis method or trading patterns used and the timing of their release. Those are provided as general market information and/or market commentary and/or the publication of market/factual data and should not be construed as containing personal and/or other investment recommendation, and/or to be Investment Advice or independent Investment Research. As such, the legal and regulatory requirements in relation to independent investment research do not apply to this material.

Asian Stock Market: US debt filibuster, RBNZ rate-hike and China chatters weigh on sentiment

Shares in the Asia-Pacific region hold lower grounds, extending the previous bearish bias, even as China cheers week-long holidays. The reason could be linked to the indecision over the US stimulus and the debt limit extension, not to forget the Sino-American tension.

US President Biden stays determine the tackle the key budget and relief package issues before the October 18 deadline despite the GOP rejection. However, Republicans are up for rejecting the motion during the Senate voting on Wednesday.

President Biden’s phone call with his Chinese counterpart and readiness to respect the Taiwan agreement can’t soother pains of Taipei as their Defense Minister Chiu Kuo-cheng said, “Military tensions with China are at their worst in more than 40 years,” per Reuters.

Amid these plays, MSCI’s index of Asia-Pacific shares outside Japan drops 0.30% while Japan’s Nikkei 225 marks around 1.5% intraday loss heading into Wednesday’s European session.

That said, the news of the US Trade Representative’s (USTR) investigation over the exclusion of China imports joins the absence of risk-negative headlines from the Chinese reality sector to battle the bears.

It’s worth noting that shares in Australia bears the burden of the risk-off mood with a 0.60% daily loss but New Zealand’s NZX 50 can’t justify the Reserve Bank of New Zealand (RBNZ) rate hike as it drops a meager 0.40% on a day at the latest.

Further, Hong Kong Leader Carrie Liam’s push for solving the housing crisis at home weigh Hang Seng, down 1.0% by the press time whereas South Korea’s KOSPI joins the flow with mild losses.

On the contrary, Indonesia’s IDX Composite bucks the downtrend with a whopping 2.0% upside while India’s BSE Sensex also prints mild gains amid domestic positives.

Looking forward, investors will pay close attention to the risk catalysts and the US ADP Employment Change for September for fresh impulse ahead of Friday’s US Nonfarm Payrolls (NFP), not to forget China’s return after a long break.

Source:https://www.fxstreet.com/news/asian-stock-market-us-debt-filibuster-rbnz-rate-hike-and-china-chatters-weigh-on-sentiment-202110060441

According to Rekha Chauhan (Analyst at FXStreet 3rd party source) the USDJPY is long positions above 111.73 with target at 111.99

Past performance is not a guarantee of future performance

Source:https://www.fxstreet.com/news/usd-jpy-price-analysis-looks-to-extend-gains-beyond-11200-202110060531

Number of Lots: Required Margin: Risk Management (50%): Potential Profit/Loss 111.99
1 € 2,878.53 € 1,439.26 € 200.93
5 € 14,392.63 € 7,196.32 € 1,004.64
10 € 28,785.26 € 14,392.63 € 2,009.27
25 € 71,963.15 € 35,981.58 € 5,023.18
50 € 143,926.31 € 71,963.15 € 10,046.37

The above chart and any information provided therein are indicative and subjective to the technical analysis method or trading patterns used and the timing of their release. Those are provided as general market information and/or market commentary and/or the publication of market/factual data and should not be construed as containing personal and/or other investment recommendation, and/or to be Investment Advice or independent Investment Research. As such, the legal and regulatory requirements in relation to independent investment research do not apply to this material.

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