<p style=““ class=“text-align-justify“>The gap between the 2-year and 10-year German bund yields fell to -27 bps yesterday, which was the widest inversion since October 1992. That gap has narrowed slightly now to -24 bps but long story short, an inversion of the yield curve as such is typically a signal that recession fears are building.</p><p style=““ class=“text-align-justify“>As we look towards next year, soaring inflation pressures and the ongoing energy crunch will continue to put the pressure on the European outlook. The only consolation so far is that the start of winter has presented with milder weather than anticipated.</p><p style=““ class=“text-align-justify“>But as long as price pressures stay elevated, the ECB will be locked between a rock and a hard place in trying to keep with tightening policy further or look towards pausing as the economy starts to run into the ground.</p>

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

<p class=“MsoNormal“>Bitcoin failed to build on the gains, rolling back to the levels of two days ago, losing 1.2% in the past 24 hours to $16.5K. </p><p class=“MsoNormal“>Global markets have been quiet due to US holidays and few meaningful economic publications, allowing the cryptocurrency to continue balancing in a tight range for almost two weeks.</p><p class=“MsoNormal“>The cryptocurrency market’s capitalisation fell by 1% to $827bn overnight. Without a solid positive stock index performance, crypto has nowhere to draw strength for future purchases.</p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.forexlive.com/terms/b/bitcoin/“ target=“_blank“ id=“40c895b3-a119-446c-9ead-2735a79a3f80_2″ class=“terms__secondary-term“>Bitcoin</a> has failed to exploit the inverted head-and-shoulders pattern fully. </p><p class=“MsoNormal“>Perhaps the reason for that is the lack of big players due to the holidays. </p><p class=“MsoNormal“>However, the chances are high that it is still because of the ongoing cautious selling in the sector: the big players continue to reduce their positions, probably forgetting about it again for a couple of years. </p><p>News background</p><p class=“MsoNormal“>The New York Times reported that the troubled cryptocurrency lender Genesis Global Capital is not ruling out bankruptcy. </p><p class=“MsoNormal“>Genesis has hired investment bank Moelis & Company to explore <a target=“_blank“ href=“https://www.forexlive.com/terms/o/options/“ target=“_blank“ id=“d0430eb9-1764-409c-ab53-4952eb20940d_1″ class=“terms__main-term“>options</a>, including filing for insolvency.</p><p class=“MsoNormal“>Ripple chief technology officer David Schwartz said the community was unlikely to learn a lesson from the FTX collapse and would be cautious going forward. </p><p class=“MsoNormal“>Changpeng Zhao, head of Binance, allowed for the possibility of buying FTX assets. In an interview with Bloomberg, he said that some of them could still be saved.</p><p class=“MsoNormal“>The 10,000 BTC stolen from the Mt.Gox exchange, which has been dormant for seven years, is on the move. </p><p class=“MsoNormal“>Ki Young Ju, a crypto analyst and head of CryptoQuant, made the announcement. In doing so, he commented that it was criminal money. The transaction was the largest since August 2017.</p><p class=“MsoNormal“>This article was written by <a target=“_blank“ href=“https://www.fxpro.com/“ rel=“nofollow noopener noreferrer“ target=“_blank“ class=“article-link“>FxPro</a>’s Senior Market Analyst Alex Kuptsikevich.</p>

This article was written by FxPro FXPro at forexlive.com.

<p style=““ class=“text-align-justify“>The lull from the Thanksgiving holiday is continuing into today but the dollar is finding itself advancing slightly across the board in European trading. Equities remain tentative with European indices seen down around 0.2% while 10-year Treasury yields are now flat at around 3.707% after having been down by as much as over 5 bps earlier in the day.</p><p style=““ class=“text-align-justify“>USD/JPY is the main mover as such, up over 0.5% to 139.40 levels currently:</p><p style=““ class=“text-align-justify“>The pair is holding just above daily support around 138.45 with the 15 November low at 137.65 also still in play. These are levels pointed out yesterday <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-holds-lower-in-thin-trading-so-far-today-20221124/“ target=“_blank“>here</a>.</p><p style=““ class=“text-align-justify“>Meanwhile, EUR/USD is down a touch but keeping in and around its 200-day moving average (blue line):</p><p style=““ class=“text-align-justify“>Elsewhere, AUD/USD is down 0.3% to 0.6740 and NZD/USD down 0.5% to 0.6230 currently. The moves aren’t anything to shout about though as the dollar did saw quite the retreat on Wednesday. AUD/USD is also still keeping just below its 61.8 Fib retracement level at 0.6767 for now:</p>

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

<p style=““ class=“text-align-justify“>The move will go into effect as of 5 December as the central bank says that it wants to keep liquidity ample and strengthen implementation of prudent monetary policy. This was already pre-empted by Eamonn in his earlier posts this week:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/pboc-rrr-cut-may-be-in-the-next-few-days-20221124/“ target=“_blank“>PBOC RRR cut may be in the next few days</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/chinese-state-financial-media-says-an-rrr-cut-for-all-banks-is-likely-20221125/“ target=“_blank“>Chinese state financial media says an RRR cut for all banks is likely</a></li></ul>

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

<p style=““ class=“text-align-justify“>The Chinese has already resorted to community lockdowns as the country’s Covid cases hit a record high and the situation is continuing to escalate ahead of the weekend. Here’s a look at the trend in cases for Beijing over the past week (measured in the 15 hours to 3pm local time each day):</p><p>18 November – 232 new local cases21 November – 316 new local cases22 November – 634 new local cases23 November – 913 new local cases24 November – 863 new local cases</p><p style=““ class=“text-align-justify“>Expect the tighter restrictions to continue in China until they get a grip of the situation. In the meantime, any major re-opening talk or pivot away from its zero-Covid policy will be put on hold surely. For financial markets, this isn’t good news for oil at least.</p>

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

<ul><li>Prior -4</li></ul><p style=““ class=“text-align-justify“>UK industrial orders weakened a little in November as the monthly order books balance fell to -5, though still just above the long-run average of -13. The outlook also continues to remain gloomy as manufacturers remain less confident about the situation in the coming months.</p>

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

<p class=“MsoNormal“>Bitcoin is adding 1.2% over the past 24 hours to $16.7K by the start of trading on Thursday. Ethereum is rising more briskly, gaining 4.3% to $1200. Crypto market capitalisation rose 2% to $837B, rebounding from the latest setback at the start of this week.</p><p class=“MsoNormal“>On the short-term charts, Bitcoin has formed an inverted head-and-shoulders pattern, suggesting an upside potential growth to $17.8K, as suggested by classic targets for this figure. </p><p class=“MsoNormal“>In turn, this would be a move out of consolidation in almost two weeks, which could further boost buyers‘ optimism.</p><p class=“MsoNormal“>Taking a step back to the larger timeframes, however, strength remains on the bears’ side as the former cryptocurrency trades below previous consolidation levels at $18.0K.</p><p>News background</p><p class=“MsoNormal“>According to Coinbase research, many investors are increasing the number of coins in their wallets despite the decline in the crypto market. Over the past year, 62% of institutional investors surveyed have increased their investments.</p><p class=“MsoNormal“>According to a Harvard University study, central banks in sanctioned countries could use bitcoin, as well as gold, as a risk hedge. Diversifying central bank reserves could eventually boost the value of cryptocurrency and gold.</p><p class=“MsoNormal“>Elizabeth Warren, a US Senate Banking Committee member, also called for stronger regulation of the cryptocurrency industry in her article for The Wall Street Journal. She said the Sam Bankman-Fried empire incident is a „wake-up call“ for the authorities.</p><p class=“MsoNormal“>New York state authorities have imposed a two-year ban on the non-environmental mining of cryptocurrencies on the Proof-of-Work (PoW) algorithm.</p><p class=“MsoNormal“>This article was written by <a target=“_blank“ href=“https://www.fxpro.com/“ target=“_blank“ class=“article-link“>FxPro</a>’s Senior Market Analyst Alex
Kuptsikevich.</p>

This article was written by ForexLive at forexlive.com.

<ul><li>Everyone acknowledges that we need a rate hike next month</li><li>Would not rule anything out right now</li></ul><p style=““ class=“text-align-justify“>They are certainly playing it coy and there’s still a debate on whether they will hike by 50 bps or 75 bps. There is talk doing the rounds though that an ECB insider is claiming that he/she is „almost sure“ that the December decision will be a 50 bps move (h/t @ LiveSquawk). That might be what has just weighed on the euro slightly from 1.0420 to 1.0395 currently.</p>

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

<p style=““ class=“text-align-justify“>The <a target=“_blank“ href=“https://www.forexlive.com/centralbank/fomc-meeting-minutes-from-the-november-2022-fed-meeting-20221123/“ target=“_blank“>Fed minutes yesterday</a> outlined more of the same from the FOMC meeting statement roughly three weeks ago, that is the central bank is starting to look to consider a slower pace of rate hikes moving forward. That is enough to keep broader market sentiment more upbeat yesterday and weighed on the dollar as well.</p><p style=““ class=“text-align-justify“>The mood is carrying over to today with bonds staying more bid so far in Europe. Trading in Treasuries may be closed but looking to regional bonds, we can see 10-year German bund yields being down by over 9 bps currently to its lowest levels in seven weeks:</p><p style=““ class=“text-align-justify“>In turn, that is continuing to weigh on the mood in USD/JPY as the pair falls to fresh lows on the day of 138.10. The pressure continues to stay on the dollar as such, with the greenback now holding slightly lower across the board as well. But USD/JPY is the big mover so far today, down over 1% at the moment as sellers look to try and test the support levels outlined <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-holds-lower-in-thin-trading-so-far-today-20221124/“ target=“_blank“>here</a>.</p>

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

<p style=““ class=“text-align-justify“>The Bundesbank does say that the gas price break may at least help to knock 1% off inflation but only while it lasts, noting that „as soon as the gas and electricity price brakes expire, the effect on inflation will reverse“. Meanwhile, the central bank also reaffirmed its outlook for a recession in Q4 this year and Q1 next year.</p>

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