<ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-daly-we-can-easily-find-ourselves-overtightening-20221021/“>Fed’s Daly: We can easily find ourselves overtightening</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/timiraos-fed-barreling-toward-a-75-bps-hike-in-november-20221021/“>Timiraos: Fed ‚barreling toward‘ a 75 bps hike in November</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/canada-august-retail-sales-07-vs-02-expected-20221021/“>Canada August retail sales +0.7% vs +0.2% expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/baker-hughes-us-oil-rigs-2-to-612-20221021/“>Baker Hughes US oil rigs +2 to 612</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-bullard-i-want-rates-that-put-significant-downward-pressure-on-inflation-20221021/“>Fed’s Bullard: I want rates that put significant downward pressure on inflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japans-kanda-we-would-not-comment-on-intervention-even-if-we-had-done-it-20221021/“>Japan’s Kanda: We would not comment on intervention even if we had done it</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/feds-evans-we-will-need-to-raise-rates-further-and-hold-them-for-awhile-20221021/“>Fed’s Evans: We will need to raise rates further and hold them for awhile</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-oct-flash-consumer-confidence-276-vs-300-expected-20221021/“>Eurozone Oct flash consumer confidence -27.6 vs -30.0 expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/penny-morduant-confirms-shes-running-to-replace-liz-truss-20221021/“>Penny Morduant confirms she’s running to replace Liz Truss</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/us-may-set-russia-oil-price-cap-above-60-20221021/“>US may set Russia oil price cap above $60</a></li></ul><p>Markets:</p><ul><li>Gold up $27 to $1654</li><li>US 10-year yields down 1 bps to 4.22%</li><li>WTI crude oil up 48-cents to $84.99</li><li>S&P 500 up 88 points to 3754</li><li>JPY and AUD lead, USD lags</li></ul><p>This week had it all and a good portion of it unwound today. We looked like we were going to get the 13th straight day of USD/JPY gains after the BOJ signaled no change in policy by expanding bond purchases. That kicked off a spike to 151.94 but the turn came when the Fed appeared to plant a WSJ story downplaying the odds of another 75 bps hike in December.</p><p>There was a blip in USD/JPY at the same time that might have been the start of Japanese intervention. It also kicked off a recovery in equities and cap in yields, especially at the short end.</p><p>What had been a trickle turned into a flood with some surprisingly dovish signals from some-time Powell mouthpiece Mary Daly, who is the President of the SF Fed. She indicated that 4.50-5.00% is still the Fed top, despite the market trying to price in another hike. Around the same time, the MOF came in with the hammer, intervening in USD/JPY and sending the pair lower by more than 400 pips.</p><p>The combination of dovish signals and FX intervention kicked off a rout on the US dollar with the pound reversing heavy losses despite the political turmoil. The euro and commodity currencies also staged large reversals.</p><p>May Fed funds now price 4.87%, down from 5.03% on Wednesday and the front end of the Treasury curve rallied alongside an impressive day for equities. It’s clearly a market that just wants a bit of certainty from the Fed before putting some money to work.</p><p>The weekly gains in stocks were the largest since late June with the S&P 500 up 4.7% with half of that today.</p><p>Have a wonderful and restful weekend because next week kicks off a wild run of central bank decisions.</p>

This article was written by Adam Button at forexlive.com.

<p>On the day:</p><ul><li>S&P 500 up 91 points to 3766, or 2.5%</li><li>Nasdaq Comp +2.3%</li><li>Russell 2000 +2.3%</li><li>DJIA +2.5%</li><li>Toronto TSX +1.5%</li></ul><p>On the week:</p><ul><li></li><li>S&P 500 +4.7%</li><li>Nasdaq Comp +5.2%</li><li>DJIA +4.9%</li></ul><p>This is a nice daily candle but it will need to get above the October 18 with earnings set to pick up.</p>

This article was written by Adam Button at forexlive.com.

<p>Bank of America’s fund manager survey released this month said US dollar longs were the most-crowded trade on the planet.</p><p>When that kind of thing unwinds, this is what it looks like. </p><p>US dollar longs are scrambling to the sidelines at the moment after Daly indicated no plan to hike more aggressively. The S&P 500 is now up 2.5% on the day.</p><p>In terms of FX, cable is up 62 pips to 1.1296 from a low of 1.1061 in a powerful turn.</p>

This article was written by Adam Button at forexlive.com.

<p>Bloomberg <a target=“_blank“ href=“https://www.bloomberg.com/news/articles/2022-10-21/us-eyes-russia-oil-cap-above-60-in-bid-to-keep-supply-flowing?leadSource=uverify%20wall“ target=“_blank“ rel=“nofollow“>reports </a>that the US may aim to set the Russian oil price cap above $60 per barrel. That’s higher than previously the $40-60 range previously signaled.</p><p>I’m starting to get the sense that the White House is looking for any kind of win it can get with this hair-brained idea.</p><p>WTI crude oil futures settled up 54-cents to $85.05 today after falling as low as $83.15. Oil turned when the US dollar reversed and finishes the week down about 50-cents.</p>

This article was written by Adam Button at forexlive.com.