<p>It is down to the optics for the beleaguered PM Truss.</p>

This article was written by Greg Michalowski at forexlive.com.

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-hits-15000-a-bit-of-a-wrestle-at-the-key-level-20221020/“>USD/JPY hits 150.00, a bit of a wrestle at the key level</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japan-finance-minister-suzuki-no-comment-on-forex-levels-20221020/“>Japan finance minister Suzuki: No comment on forex levels</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japan-top-currency-diplomat-kanda-we-are-always-ready-to-take-action-in-forex-market-20221020/“>Japan top currency diplomat Kanda: We are always ready to take action in forex market</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/liz-truss-reportedly-in-meeting-with-1922-committee-chairman-sir-graham-brady-20221020/“>Liz Truss reportedly in meeting with 1922 Committee chairman, Sir Graham Brady</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/boes-broadbent-market-pricing-of-bank-rate-path-implies-pretty-material-hit-to-demand-20221020/“>BOE’s Broadbent: Market pricing of bank rate path implies pretty material hit to demand</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-august-current-account-balance-263-billion-vs-199-billion-prior-20221020/“>Eurozone August current account balance -€26.3 billion vs -€19.9 billion prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-september-ppi-23-vs-13-mm-expected-20221020/“>Germany September PPI +2.3% vs +1.3% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-october-business-confidence-102-vs-102-prior-20221020/“>France October business confidence 102 vs 102 prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/switzerland-september-trade-balance-chf-400-billion-vs-chf-342-billion-prior-20221020/“>Switzerland September trade balance CHF 4.00 billion vs CHF 3.42 billion prior</a></li></ul><p>Markets:</p><ul><li>AUD and NZD lead, USD lags on the day</li><li>European equities mixed; S&P 500 futures up 0.2%</li><li>US 10-year yields flat at 4.129%</li><li>Gold up 0.6% to $1,637.73</li><li>WTI crude up 1.7% to $86.98</li><li>Bitcoin flat at $19,201</li></ul><p style=““ class=“text-align-justify“>In the transition from Asia to Europe, the dollar fell as <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-eases-as-china-reportedly-mulls-reducing-quarantine-period-20221020/“ target=“_blank“>China is said to consider cutting its inbound COVID-19 quarantine period</a> from 10 days to 7 days. It is perhaps <a target=“_blank“ href=“https://www.forexlive.com/news/the-beginning-of-the-end-of-chinas-zero-covid-policy-20221020/“ target=“_blank“>the beginning of the end of the country’s zero-Covid policy</a> but markets quickly moved on with the dollar steadying itself as we get into European morning trade.</p><p style=““ class=“text-align-justify“>USD/JPY then moved up to hit 150.00 for the first time since August 1990 and saw volatile spikes in and around the figure level. Ultimately, the pair settled around 149.80-90 before the a bit of a recovery in broader market sentiment helped to see the pair hug 149.70-80 levels the moment.</p><p style=““ class=“text-align-justify“>The dollar was mixed throughout, advancing against the pound as well as against the commodity currencies with risk sentiment looking sluggish initially. But that is turning in the past hour as risk trades pick up a little with bond yields turning – at least for the moment.</p><p style=““ class=“text-align-justify“>GBP/USD moved up from 1.1171 to 1.1240 and is now up 0.1% at 1.1220 levels. Meanwhile, EUR/USD nudged higher from 0.9775 to 0.9828 and is holding closer to 0.9800 currently with large expiries seen at the figure level.</p><p style=““ class=“text-align-justify“>The aussie was dragged lower early on after a poor Australian jobs report, with AUD/USD down to 0.6230 before picking itself back up now to hold just above 0.6300 as equities hold up. This comes on the turn in the risk mood, with S&P 500 futures now being up 0.2% after having been down by as much as 0.5% early on.</p><p style=““ class=“text-align-justify“>10-year Treasury yields were up 4 bps to 4.17% early on and that kept some pressure on equities before turning lower to be down by 2 bps at 4.11%. That sparked a bit of a recovery in broader sentiment but yields are now back up by 2 bps to 4.13%.</p><p style=““ class=“text-align-justify“>In other news, the UK political drama carries on as Liz Truss is said to call for a meeting with 1922 Committee chief, Sir Graham Brady, to „check on the temperature“ as almost everyone and anyone is calling for her head.</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>Alas, here we go? There have been back and forth reports since the morning as to whether she will have survived the day or if we will have to wait until after 31 October. But it seems like we are seeing things move quickly now, so let’s see how the events will unfold in the coming hours.</p><p style=““ class=“text-align-justify“>Mind you, this is not a planned meeting between the two. From the Daily Mail’s political editor:</p>

This article was written by Justin Low at forexlive.com.

<p style=““ class=“text-align-justify“>I’m not seeing any specific headlines at least to have driven the move, with 10-year Treasury yields now turning on its head to be down 2 bps at 4.11%. It was up by over 4 bps earlier to 4.17% and the drive lower in yields is helping sentiment in equities as well for now.</p><p style=““ class=“text-align-justify“>S&P 500 futures have erased losses to turn flat, after having been down by about 0.5% earlier in the session. In turn, this is helping to see commodity currencies nudge up to fresh highs on the day.</p><p style=““ class=“text-align-justify“>USD/CAD is down 0.3% to 1.3723 with daily support around 1.3700 still a key area to watch technically. Meanwhile, AUD/USD is back up by 0.5% to 0.6300 as buyers seize back near-term control:</p><p style=““ class=“text-align-justify“>Short-term resistance around 0.6340-45 remains the key region limiting any topside move for the pair though.</p>

This article was written by Justin Low at forexlive.com.

<ul><li style=““ class=“text-align-justify“>The justification for tighter policy is clear</li><li style=““ class=“text-align-justify“>Whether interest rates have to rise by as much as currently priced in financial markets remains to be seen</li><li style=““ class=“text-align-justify“><a target=“_blank“ href=“https://www.bankofengland.co.uk/-/media/boe/files/speech/2022/october/the-inflationary-consequences-of-real-shocksspeech-by-ben-broadbent.pdf?la=en&hash=40EE6F0A7FE902A87B1349A71B04FF37A2D62C74″ target=“_blank“ rel=“nofollow“>Full comments</a></li></ul><p style=““ class=“text-align-justify“>There’s a slight pullback on market pricing for the BOE after his comments but nothing too material. After all, the immediate outlook remains the more important one here and a 75 bps rate hike is fully priced in going into the 3 November policy decision. OIS swaps show that a 100 bps rate move is now seen roughly at 15%, down from 25% earlier.</p><p style=““ class=“text-align-justify“>As for his headline comment, he’s talking about when the bank rate moves to somewhere around 5.25% and how that will result in a cummulative drag of GDP by almost 5% under the entire tightening cycle. As if the central bank will keep tightening when the economy is in such utter shambles. Pfft.</p><p style=““ class=“text-align-justify“>/<a target=“_blank“ href=“https://www.forexlive.com/terms/g/gbp/“ target=“_blank“ id=“3a5ab7c1-ff09-45ea-87d4-eea6613bb754_1″ class=“terms__main-term“>GBP</a></p>

This article was written by Justin Low at forexlive.com.