<ul><li>Prior -2.0%</li><li>Market index 204.6 vs 214.3 prior</li><li>Purchase index 164.2 vs 170.5 prior</li><li>Refinancing index 394.6 vs 423.2 prior</li><li>30-year mortgage rate 6.94% vs 6.81% prior</li></ul><p style=““ class=“text-align-justify“>The average interest rate for the most popular US home loan rose further to 6.94% in the past week – its highest since 2002 – as conditions continue to deteriorate in the mortgage market. The main index is seen dropping over 4% again in the past week, falling to its lowest since 1997. Boom. 💥</p>

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

<p style=““ class=“text-align-justify“>With a lack of headlines to work with, European morning trade today has been rather restrained. The dollar is still keeping a slight advance across the board, working with levels noted earlier <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-in-control-as-risk-optimism-evaporates-20221019/“ target=“_blank“>here</a>.</p><p style=““ class=“text-align-justify“>Meanwhile, equities pushed lower in the opening two hours of the Europe cash market open but are now starting to nudge back up again though I would say that the gains may be rather tentative. Wall Street will have the final say and after two big days of gains to start the week, are we starting to see the momentum falter?</p><p style=““ class=“text-align-justify“>S&P 500 futures are up 12 points, or 0.3%, while European indices are also hanging on to light gains at the moment. The DAX is up 0.2%, CAC 40 up 0.5%, and UK FTSE up 0.1%.</p><p style=““ class=“text-align-justify“>There’s still plenty to sort out on the day with Treasury yields holding higher as well, keeping thereabouts after the move from earlier <a target=“_blank“ href=“https://www.forexlive.com/news/a-sense-of-uneasiness-as-bond-yields-pull-higher-20221019/“ target=“_blank“>here</a>.</p>

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

<ul><li>Core CPI +4.8% vs +4.8% y/y prelim</li></ul><p style=““ class=“text-align-justify“>A slight revision lower to the headline reading, but close enough to be called double-digits – just not officially now. Either way, it still represents a record high inflation figure in the Eurozone. The core reading is unchanged and this still puts the pressure on the ECB to act ahead of a gruelling winter for the euro area economy.</p>

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

<p style=““ class=“text-align-justify“>The pair is trading at the lows for the day now, with the dollar holding in a decent spot in trading today. Only the kiwi can really have anything to shout about against the dollar and that owes to higher-than-expected inflation data as noted <a target=“_blank“ href=“https://www.forexlive.com/news/kiwi-holds-higher-after-higher-than-expected-inflation-20221018/“ target=“_blank“>here</a>. As for the pound, the recent relief bounce is looking to fade now in a push back to 1.1260 against the dollar.</p><p style=““ class=“text-align-justify“>As the UK gilts crisis dies down, the focus for the currency turns towards the economic outlook and BOE outlook again. As for politics, Truss is facing daunting odds to stay in charge as prime minister. In a bizarre twist, the latest YouGov Tory members poll show that Boris Johnson is the top choice to replace Truss. I mean, what else can you say to that.</p><p style=““ class=“text-align-justify“>Going back to the chart above, cable is now being pressured close to the 100-hour moving average (red line) and a fall below that will see the near-term bias turn more neutral instead. The 1.1200 mark and the 200-hour moving average (blue line) will be the next area to watch for support and a further drop will exacerbate any further decline towards 1.1000 again.</p><p style=““ class=“text-align-justify“>Outside of politics, the pound is also struggling for comfort as the BOE came out to deny that it was going to delay QT – which is scheduled for 31 October. That’s not offering too much assurance for gilts as well, which are still at elevated levels even though newly appointed UK finance minister, Jeremy Hunt, ripped up the mini-budget yesterday.</p><p style=““ class=“text-align-justify“>On the balance of things, it’s still tough to look at the pound with much confidence and the daily chart also points to some technical resistance via a trendline from the recent highs:</p><p style=““ class=“text-align-justify“>That suggests that the technicals are also supporting a consideration for limited relief in the latest bounce for the pound, adding to the already bleak fundamental outlook.</p>

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

<p style=““ class=“text-align-justify“>Sure, sure. The endorsement continues after US last week said that the OPEC+ decision to cut oil output was engineered for political reasons instead. Given such a pushback, one can expect the bloc to keep with the latest path and to reduce supplies further in the coming months.</p>

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

<p class=“MsoNormal“>Are you trying to keep up with the
constantly fluctuating markets? You’re not alone. 2022 has been extremely
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understanding of what happens during volatile market periods and what you can
do to boost your trading strategies. Keep reading to find out more!</p><p class=“MsoNormal“>What
is market volatility?</p><p class=“MsoNormal“>It’s a common misconception that
volatility is only about prices falling rapidly, when in reality it has to do
with any sudden price movement, including an unexpected rise in prices. In
simple terms, an indicator of market volatility is the frequency and magnitude
of price movements, whether upward or downward. Therefore, market volatility
increases when price swings are larger and more frequent.</p><p class=“MsoNormal“>It’s helpful to keep in mind that
volatility is a normal part of the cycle of online trading. In this way, you
can be more prepared to take control of your trading positions.</p><p class=“MsoNormal“>What
causes volatility in the markets</p><p class=“MsoNormal“>Volatility is often a result of
economic factors, such as financial news, interest rate changes, and fiscal
policy. More recently, a leading factor has been political developments. As
volatility reflects investor sentiment, any factor influencing investor behavior
will influence market volatility. Markets are typically considered volatile if
they rise or fall more than 1% over a long period of time. </p><p class=“MsoNormal“>The
current state of the markets</p><p class=“MsoNormal“>2022 has been full of ups and downs for
<a target=“_blank“ href=“https://ellandroadcapital.com/product-specifications/“ target=“_blank“>CFDs in every asset class</a>, including
stocks, forex, and crypto futures. Major economic and political events have
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some of the most prominent examples of market volatility this year:</p><p class=“MsoNormal“>Forex: Some of the most powerful currencies, such as the EUR, JPY,
and GBP, experienced record-breaking lows, while on the other hand, the USD has
managed to push through the turbulent global economies and is expected to go
even higher by the end of the year.</p><p class=“MsoNormal“>Stocks and Indices: The S&P 500 witnessed one of its worst
performances in decades, reflecting a bearish market sentiment.</p><p class=“MsoNormal“>Cryptocurrency: The crypto
market is facing one of its most challenging years as the uncertainty of the
economic outlook has made traders turn to safe havens rather than
cryptocurrencies. For example, Bitcoin dropped by 56% during the Q2 of 2022 and
is still struggling to remain above average levels.</p><p class=“MsoNormal“>The
bottom line</p><p class=“MsoNormal“>An essential trader trait is being
aware that online trading entails high risk as there are many factors that can
impact the markets and affect your trading positions.</p><p class=“MsoNormal“>What can you do to be more prepared?
Staying up to date with economic events is always a good idea so you can be in
a better position to understand what is happening in the markets, while also practicing
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the volatile markets.</p><p class=“MsoNormal“>Risk
Warning: Contracts for Difference (‘CFDs’) are complex financial products, with
speculative character, the trading of which involves significant risks of loss
of capital. </p><p class=“MsoNormal“>Disclaimer:
This
material is considered a marketing communication and does not contain and
should not be construed as containing investing advice or a recommendation, or
an offer of or solicitation for any transactions in financial instruments or a
guarantee or a prediction of future performance. Past performance is not a guarantee
of or prediction of future performance.</p>

This article was written by ForexLive at forexlive.com.

<p style=““ class=“text-align-justify“>This relates to the earlier report <a target=“_blank“ href=“https://www.forexlive.com/centralbank/boe-reportedly-to-further-delay-qt-to-ensure-gilts-market-stability-20221018/“ target=“_blank“>here</a>. I think it would depend on what exactly they will define as being ‚inaccurate‘ but the pound did retreat a little on the news to a low of 1.1286 before keeping back around 1.1315 now – down 0.3% on the day.</p><p style=““ class=“text-align-justify“>There was also a brief jump in gilt yields, with 30-year yields moving up to 4.48% before keeping around 4.42% now – up 5 bps on the day.</p><p style=““ class=“text-align-justify“>Delaying QT is surely the right approach considering the recent fiasco and the damage to <a target=“_blank“ href=“https://www.forexlive.com/terms/l/liquidity/“ target=“_blank“ id=“633aaf0b-b4a1-40c5-8fbe-bf158af520a1_1″ class=“terms__main-term“>liquidity</a> in gilts. As such, trying to portray otherwise is a bit of a head scratcher. Mind you, 30-year yields are still some 92 bps higher than before the mini-budget announcement by Truss and Kwarteng last month.</p>

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

<ul><li>Prior -60.5</li><li>Economic sentiment -59.2 vs -65.7 expected</li><li>Prior -61.9</li></ul><p>The economic situation has worsened again compared to the previous month, with ZEW noting that the probability that real GDP will decline in the course of the next six months has also increased considerably.</p>

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

<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-finance-minister-hunt-we-will-reverse-almost-all-tax-measures-announced-on-23-sept-20221017/“>UK finance minister Hunt: We will reverse almost all tax measures announced in growth plan</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-pillars-of-truss-have-fallen-20221017/“>The pillars of Truss have fallen</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-says-will-delay-release-of-q3-economic-indicators-including-tomorrows-gdp-20221017/“>China says will delay release of Q3 economic indicators, including tomorrow’s GDP</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/whats-behind-the-sudden-plunge-in-snb-sight-deposits-20221017/“>What’s behind the sudden plunge in SNB sight deposits?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/snb-total-sight-deposits-we-14-october-chf-6198-bn-vs-chf-6393-bn-prior-20221017/“>SNB total sight deposits w.e. 14 October CHF 619.8 bn vs CHF 639.3 bn prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/china-state-banks-seen-acting-in-swaps-market-to-try-and-stabilise-the-yuan-currency-20221017/“>China state banks seen acting in swaps market to try and stabilise the yuan currency</a></li></ul><p>Markets:</p><ul><li>GBP leads, JPY lags on the day</li><li>European equities higher; S&P 500 futures up 1.2%</li><li>US 10-year yields down 5.3 bps to 3.953%</li><li>Gold up 1.0% to $1,657.63</li><li>WTI crude up 0.1% to $85.63</li><li>Bitcoin up 1.5% to $19,463</li></ul><p style=““ class=“text-align-justify“>The day started with a gap higher in the pound as traders hoped for a turn in the fiscal path to be set out by newly appointed UK finance minister, Jeremy Hunt. An emergency statement was then called and Hunt delivered by ripping apart the mini-budget that was announced on 23 September.</p><p style=““ class=“text-align-justify“>UK bonds and the pound rallied going into the statement and largely held their ground in the aftermath. 30-year gilt yields are down 42 bps to 4.36% while GBP/USD had a kneejerk jump from 1.1280 to 1.1330 before falling back to 1.1250 and is now back up to 1.1290-00 levels.</p><p style=““ class=“text-align-justify“>The better mood in cable is also helped by a softer dollar overall, as equities are taking comfort amid a bid in bonds as well today. US futures are up over 1% and that is feeding into better sentiment in broader markets and among major currencies.</p><p style=““ class=“text-align-justify“>EUR/USD is up 0.2% to 0.9740 but off earlier highs of 0.9770. Meanwhile, USD/CAD is down 0.5% to near 1.3800 and AUD/USD is up 0.8% to 0.6245 but off its earlier high of 0.6265 during the session. USD/JPY is a notable exception as the yen stays under pressure, with the pair now up 0.1% to 148.85 – holding near fresh highs since 1990.</p><p style=““ class=“text-align-justify“>It looks like we’re in for a calmer start to the week but all of this is <a target=“_blank“ href=“https://www.forexlive.com/news/counting-down-to-the-central-bank-bonanza-20221017/“ target=“_blank“>right before we get to the central bank bonanza</a> in the next two weeks, so perhaps it is just the calm before the storm.</p>

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

<p style=““ class=“text-align-justify“>The pair was holding around 1.1280 before Hunt’s statement came and right after, it pushed to a high of 1.1330. That came as the dollar also softened as risk trades extended gains but now we’re seeing a bit of a pullback in cable to 1.1270-80 levels again. One can argue that we already saw the bullish price action come into play at the start of the day but even so, the reaction here is rather tepid in my view.</p><p style=““ class=“text-align-justify“>So, what is next for the pound in this instance?</p><p style=““ class=“text-align-justify“>I think the main takeaway is that this whole political and finance crisis related to Trussnomics can be put to bed at least. That could see gilt yields pull back further but at the same time, it also means that the BOE is likely not needed to overextend and to do more by acting aggressively in order to address whatever policy missteps there might have been from the government.</p><p style=““ class=“text-align-justify“>The fact that Hunt also announced that the energy price cap will only last until April next year is a testament to that, in the sense that the government is now working more in line with the central bank.</p><p style=““ class=“text-align-justify“>However, when you look at where this puts us, it is basically a reset to September. What does that mean? It means that we are still looking at a position where the UK economy is still struggling to deal with high inflation, the cost-of-living crisis, an energy crunch and a pending recession that could last for up to a year.</p><p style=““ class=“text-align-justify“>That’s not exactly a pretty picture now, is it?</p><p style=““ class=“text-align-justify“>And when you consider that against the backdrop of a Fed that is still aggressively tightening and not letting up in terms of putting the pedal to the metal, the path of least resistance still seems for a move lower in cable.</p><p style=““ class=“text-align-justify“>In the bigger picture, we already got that corrective bounce from 1.04 to 1.15 in the past few weeks and so there is appetite for sellers to come back into the fray. All there is now is to watch for equities sentiment (indirectly dollar sentiment) as we look towards the central bank bonanza in the coming two weeks.</p><p style=““ class=“text-align-justify“>If there is a material breakdown to the levels pointed out <a target=“_blank“ href=“https://www.forexlive.com/news/us-futures-higher-but-key-technicals-are-being-questioned-20221017/“ target=“_blank“>here</a>, expect another rush into dollars and broader markets to sell off again as it has done over the past few months.</p>

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