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Market Review 14-10-21

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Forex Today: Falling yields spur a dollar sell-off

What you need to know on Thursday, October 14:

The dollar sold-off on Wednesday dragged lower by falling US Treasury yields. The market mood was dismal throughout most of the day, with Asian indexes closing in the red after a mixed Chinese Trade Balance, which posted a surplus off $66.76 billion, much better than anticipated. Exports were sharply up, although imports contracted.

Yields were weaker ever since the day started, but accelerated their slump following the release of US inflation data. The September Consumer Price Index was upwardly revised to 5.4% YoY from a previous estimate of 5.3%, while the core annual reading was confirmed at 4%.

The US Federal Reserve published the Minutes of its latest meeting. As expected, the document showed that policymakers are ready to kick-start tapering, a gradual reduction in the pace of asset purchases, aiming to end it in mid-2022.

Wall Street once again struggled to advance, with the three majors indexes closing mixed around their opening levels. JP Morgan announced upbeat third-quarter earnings, reporting profits of $11.7 billion.

The EU announced a series of proposals that would reduce the burden on Irish Sea trade created by Brexit’s Northern Ireland Protocol. Meanwhile, BOE’s Governor Andrew Bailey reiterated his hawkish message.

The EUR/USD pair trades near the 1.1600 figures near fresh weekly highs, while GBP/USD hovers around 1.3660. Commodity-linked currencies resumed their advances with USD/CAD trading at 1.2430 a fresh multi-month low, and the AUD/USD approaching 0.7400 ahead of the release of Australian employment figures.

Gold benefited the most from the broad dollar’s weakness, now trading at $1,791 a troy ounce. Crude oil prices remain steady, with WTI at around $80.50 a barrel.

Source: https://www.fxstreet.com/news/forex-today-falling-yields-spur-a-dollar-sell-off-202110131947




According to Rekha Chauhan (Analyst at FXStreet – 3rd party source) the EURUSD is long positions above 1.1617 with target at 1.1642

Past performance is not a guarantee of future performance

Source: https://www.fxstreet.com/news/eur-usd-price-analysis-upside-need-validation-above-11600-202110140008

Number of Lots: Required Margin: Risk Management (50%): Potential Profit/Loss 1.1642
1 € 3,333.33 € 1,666.67 € 215.70
5 € 16,666.67 € 8,333.33 € 1,078.52
10 € 33,333.33 € 16,666.67 € 2,157.03
25 € 83,333.33 € 41,666.67 € 5,392.58
50 € 166,666.67 € 83,333.33 € 10,785.16

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.

Europe’s stocks head for higher open as markets digest U.S. inflation data, earnings

European stocks are expected to open higher on Thursday with investors around the world reflecting on the latest inflation data and earnings out of the U.S.

The U.K.’s FTSE index is expected to open 32 points higher at 7,175, Germany’s DAX 53 points higher at 15,303, France’s CAC 40 up 32 points at 6,631and Italy’s FTSE MIB 123 points higher at 25,777, according to data from IG.

Global markets are digesting the latest U.S. inflation data which rose higher than expected in September, increasing pressure on the U.S. Federal Reserve to raise rates sooner rather than later.

The U.S. consumer price index jumped 0.4% in September from the month prior and 5.4% year over year, the Labor Department reported Wednesday. Economists expected to see a month-to-month increase of 0.3% or annualized rate of 5.3%, according to Dow Jones.

Minutes released Wednesday afternoon from the Federal Open Market Committee’s September meeting showed the central bank could begin tapering its asset-purchase program as soon as mid-November.

Also in focus is the third-quarter earnings season which kicked off on Wednesday with JPMorgan Chase; the bank reported that quarterly profit topped expectations following a boost from better-than-expected loan losses. Bank of America, Citigroup, Morgan Stanley and Wells Fargo are all scheduled to report earnings before the bell Thursday.

In Asia-Pacific overnight, stocks were mostly higher as investors reacted to the release of Chinese inflation data for September which showed the producer price index for September soared 10.7% compared to a year ago, slightly above expectations in a Reuters poll for a 10.5% increase. U.S. stock futures were little changed Wednesday night.

Looking ahead to CNBC’s coverage on Thursday, Russian Energy Week continues and we will be interviewing Russian Deputy Prime Minister Alexander Novak, who was the former energy minister, later this morning.

On Wednesday, CNBC hosted a panel with Russian President Vladimir Putin and the CEOs of BP, TotalEnergies, ExxonMobil and Daimler with topics ranging from gas to geopolitics.

Putin told CNBC that Europe’s energy crisis was largely of its own making and said Russia was ready to boost supplies to the region, if asked.

Earnings in Europe come from Publicis and Ocado on Thursday with data releases including Swiss producer prices and Spanish final inflation data for September.

Source: https://www.cnbc.com/2021/10/14/european-markets-weigh-up-us-inflation-data-earnings.html

According to Rekha Chauhan (Analyst at FXStreet 3rd party source) the GBPJPY is long positions above 155.07 with target at 155.44

Past performance is not a guarantee of future performance

Source: https://www.fxstreet.com/news/gbp-jpy-price-analysis-consolidates-at-four-month-highs-near-15530-202110140446

Number of Lots: Required Margin: Risk Management (50%): Potential Profit/Loss 155.44
1 € 3,935.46 € 1,967.73 € 282.10
5 € 19,677.29 € 9,838.65 € 1,410.49
10 € 39,354.58 € 19,677.29 € 2,820.98
25 € 98,386.46 € 49,193.23 € 7,052.46
50 € 196,772.92 € 98,386.46 € 14,104.91

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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