DAILY MARKET ANALYSIS 13-10-2022

International benchmark Brent crude oil traded cautiously on Thursday in Europe with the pullback seen earlier in the week clearly losing a little steam. Prices had risen quite sharply into October as the OPEC+ group of producers (the Organization of Petroleum Exporting Countries and allies) announced it would cut production by a collective two million barrels per day.

Stocks

Stock Indices are in the red to start today’s trading session. As of 10:00 a.m. EST, the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 are down 1%, 1.4%, and 2.1%, respectively. This is the result of a hotter-than-expected inflation report (see CPI results in the previous update).

Currencies

• EUR/USD is in a strong downward trend channel since February. Economists at KBC Bank expect the world’s most popular currency pair to remain under pressure.

• GBP/USD The new UK government’s fiscal plan prompted a sharp sell-off in Gilts and sterling. In the view of economists at RBC Economics, cable could retest its multi-decade low.

• USD/JPY pair attracts fresh buying during the early North American session and spikes to a new 24-year peak, closer to mid-147.00s in reaction to hotter US consumer inflation figures.

• AUD/USD pair comes under intense selling pressure during the early North American session and dives to its lowest level since April 2020 in reaction to stronger US consumer inflation figures.

Cryptos

Bitcoin and other cryptocurrencies were falling Thursday, in line with stocks, as they reacted to key inflation data. Bitcoin has remarkably lacked its famous volatility lately and how its reaction plays out will be a key test of this trend.

Commodities

Gold: The gold price has dropped on the back of the main event for the week's outcome in the US Consumer Price Index. The yellow metal has fallen to $1,645 while the high of the day has been $1,682.49. Eyes are on 28 September's lows of $1,614.

Up Ahead – Friday 14-10-2022

•          USD   Core Retail Sales m/m

•          USD   Prelim UoM Consumer Sentiment

*The information presented above is intended for informative and educational purposes, should not be considered as investment advice, or an offer or solicitation for a transaction in any financial instrument and thus should not be treated as such. Past performance is not a reliable indicator of future results.