<p style=““ class=“text-align-justify“>And so it continues. The pandemic was the initial trigger for Germany suspending its debt brake and things haven’t really gotten back on track since then. Considering the bleak outlook for next year, we could see things continue down this path for quite a while yet. 10-year German bund yields are at 2.50% today, its highest since 2011:</p>

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

<p style=““ class=“text-align-justify“>10-year Treasury yields are now up over 5 bps to 4.28% and that is pinning equities lower, with S&P 500 futures now down 22 points, or 0.6%, on the day. Nasdaq futures are suffering the most, down 0.9% as tech sentiment suffers from higher yields. European indices are also seen struggling with the DAX down 1.6%, CAC 40 down 1.7%, and UK FTSE down 0.8% at the moment.</p><p style=““ class=“text-align-justify“>In turn, this is translating into fresh bids for the dollar as it moves to session highs against most major currencies. USD/JPY is one as it pushes to 150.78, its highest levels in 32 years as noted <a target=“_blank“ href=“https://www.forexlive.com/news/the-shackles-are-starting-to-come-off-again-for-usdjpy-20221021/“ target=“_blank“>here</a>. Meanwhile, EUR/USD has also moved down from 0.9800 earlier to 0.9770 again.</p><p style=““ class=“text-align-justify“>As for more risk-sensitive currencies, we are seeing AUD/USD fall to near 0.6250 as sellers lean on the key hourly moving averages earlier to stay in near-term control:</p><p style=““ class=“text-align-justify“>Meanwhile, GBP/USD is also slumping as it is down 0.7% to 1.1145 as price falls to a fresh one-week low amid a firmer dollar and a lack of confidence in the UK outlook for the pound:</p><p style=““ class=“text-align-justify“>After the early optimism in the opening two days of this week, it looks like broader market sentiment is starting to get a bit nervous ahead of the key central bank meetings coming up in the next two weeks.</p>

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

<p style=““ class=“text-align-justify“>The pair is now moving up to 150.70 as the dollar is pressing higher amid a softer mood in equities while bond yields are continuing to stay underpinned on the day. That is the highest levels since 1990 for USD/JPY as the shackles are coming undone.</p><p style=““ class=“text-align-justify“>The highs seen back in 1990 were at 160.40 so that leaves plenty of room to roam to the upside for the pair as the fundamental outlook remains unchanged. The only thing to be mindful about is intervention by Japanese officials but they’d also have to be wary considering how markets know that all the factors dictate that the path of least resistance is still for a move higher in the pair.</p><p style=““ class=“text-align-justify“>At this point, it will take some form of pivot by the BOJ to really save the yen. Otherwise, it’s hard to imagine how traders are not going to try and punish the narrative.</p>

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

<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.

<p style=““ class=“text-align-justify“>As risk sentiment nudges lower again while Treasury yields keep higher, the dollar is finding fresh bids on the day in a push to the highs. EUR/USD is now down 0.9% to 0.9760 in a fall below its 100-hour moving average at 0.9791 and is now looking towards its 200-hour moving average at 0.9755 next:</p><p style=““ class=“text-align-justify“>A push below the latter will see sellers resume near-term control and price will look towards the 13 October low at 0.9631 next before turning towards 0.9600 again.</p><p style=““ class=“text-align-justify“>Meanwhile, GBP/USD is also declining further after its earlier fall below the 100-hour moving average. The pair now looks towards 1.1200 with the 200-hour moving average at 1.1180 also in focus:</p><p style=““ class=“text-align-justify“>Much like the EUR/USD, the pair is also seeing the near-term bias now shift to be more neutral. And a push below the 200-hour moving average (blue line) will give sellers room to roam back towards 1.1000 next.</p><p style=““ class=“text-align-justify“>Elsewhere, USD/JPY remains perky in a run to 149.70, up 0.3% on the day, as it continues to <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-nudges-closer-towards-intervention-trigger-20221019/“ target=“_blank“>flirt with a potential intervention trigger</a> ahead of the 150.00 mark.</p><p style=““ class=“text-align-justify“>Looking over to commodity currencies, they are moving back to the lows for the day as equities retreat ahead of US trading. S&P 500 futures are now down 12 points, or 0.3%, and that is seeing the loonie, aussie, and kiwi nudge lower. USD/CAD is up 0.4% to 1.3790 while AUD/USD is falling by 0.5% to 0.6280 and threatening a fall below its key hourly moving averages at 0.6282-94. For the latter, a break below the near-term support in that region will allow for another run at 0.6200 for sellers.</p>

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

<ul><li>I am sorry and have made mistakes</li><li>It is right to make changes to economic approach</li><li>Spending will go up next year and the year after</li></ul><p style=““ class=“text-align-justify“>It’s quite a feisty session this one as she is brutally attacked by Starmer, as you would expect though. You can watch it <a target=“_blank“ href=“https://www.youtube.com/watch?v=NT14sw0_RRc“ target=“_blank“ rel=“nofollow“>here</a>.</p>

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