<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.

<ul><li>Exact stance of policy will depend on outlook and risks</li><li>Economic data has been mixed</li><li>Labor market remains strong</li><li>Seeing signs that some of the unusual strength in labor markets may be waning</li><li>Personal forecast is broadly in line with Fed September projections</li></ul><p>There’s no clear signal here but, if anything, the comment about the Sept projections is in line with what Daly was saying earlier.</p>

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

<p style=““ class=“text-align-justify“>I don’t think much else needs to be said at this point. The lack of any intervention signals from Japan officials today is seeing USD/JPY buyers whet their appetite for a push higher. The pair is now up nearly 1% to 151.50 levels, reaching fresh highs in 32 years.</p><p style=““ class=“text-align-justify“>As mentioned earlier, there’s a long way to go before the 1990 highs at 160.40 so that leaves plenty of room to roam to the upside. The only thing to be wary about is intervention play. But as the fundamentals remain unchanged, the MOF and BOJ themselves have to be wary as every attempt that they will set out from here will lose effectiveness over time.</p>

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

<p style=““ class=“text-align-justify“>The latest numbers are showing that Rishi Sunak has secured the backing of 45 Tory lawmakers, with Boris Johnson having 37 backers, and Penny Mordaunt with 16 backers. These are MPs who have made declarations publicly but it is being said that Johnson’s allies are ‚confident‘ he can secure the 100 backers needed to get his name on the ballot paper.</p><p style=““ class=“text-align-justify“>The three mentioned are the favourites in the race to replace Liz Truss, with candidates having until Monday 2pm local time to secure 100 nominations in order to contest the prime minister seat.</p><p style=““ class=“text-align-justify“>This is from The Telegraph:</p><p style=““ class=“text-align-justify“>Nadine Dorries, the former culture secretary who is backing Mr Johnson, said: “I am quite confident he will get the 100 signatures.” </p><p style=““ class=“text-align-justify“>Meanwhile, an anonymous Cabinet minister told Sky News that they would “expect” Mr Johnson to hit the 100 number while a supporter of the former premier told Tortoise: „We have the 100 to nominate.“</p>

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

<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.