<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/dollar-creeps-higher-as-market-moves-are-scattered-20220930/“>Dollar creeps higher as market moves are scattered</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/eurozone-september-preliminary-cpi-100-vs-97-yy-expected-20220930/“>Eurozone September preliminary CPI +10.0% vs +9.7% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-september-preliminary-cpi-56-vs-59-yy-expected-20220930/“>France September preliminary CPI +5.6% vs +5.9% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/japan-spent-28-trillion-on-currency-intervention-in-the-past-month-mof-20220930/“>Japan spent ¥2.8 trillion on currency intervention in the past month – MOF</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-q2-final-gdp-02-vs-01-qq-prelim-20220930/“>UK Q2 final GDP +0.2% vs -0.1% q/q prelim</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/the-fine-print-to-todays-uk-q2-gdp-report-20220930/“>The fine print to today’s UK Q2 GDP report</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/uk-september-nationwide-house-prices-00-vs-03-mm-expected-20220930/“>UK September Nationwide house prices 0.0% vs +0.3% m/m expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/opec-talks-said-to-narrow-range-of-potential-oil-output-cut-to-05-to-10-mil-bpd-20220930/“>OPEC+ talks said to narrow range of potential oil output cut to 0.5 to 1.0 mil bpd</a></li></ul><p style=““ class=“text-align-justify“>Markets:</p><ul><li>USD leads, NZD lags on the day</li><li>European equtiies higher; S&P 500 futures up 0.1%</li><li>US 10-year yields down 5 bps to 3.695%</li><li>Gold up 0.2% to $1,663.33</li><li>WTI crude down 0.1% to $81.15</li><li>Bitcoin down 0.2% to $19,468</li></ul><p style=““ class=“text-align-justify“>With month-end and quarter-end in focus, the market moves were scattered in European trading as the initial push and pull in the dollar eventually lead to the greenback now moving higher with early gains in stocks slowly dissipating. But the bid in bonds is staying the course as yields are dragged lower again, keeping the momentum after the BOE intervention earlier in the week.</p><p style=““ class=“text-align-justify“>In terms of data, Eurozone annual inflation hit double-digits coming in at a record 10% reading with the core reading also jumping to 4.8% – paving the way for the ECB to be more aggressive next month.</p><p style=““ class=“text-align-justify“>The pound was also in focus as Truss and Kwarteng met with the OBR but did not ask the fiscal body to alter its plans, suggesting that the government isn’t backing down from its economic plan. The quid was initially higher with cable moving up to 1.1235 before falling back down to 1.1030 now as dollar gains also factor into the equation amid volatile trading.</p><p style=““ class=“text-align-justify“>After some pushing and pulling early on, EUR/USD is settling lower being down 0.7% to 0.9740 – pushing back below its 200-hour moving average at 0.9759. That keeps the near-term bias more neutral now.</p><p style=““ class=“text-align-justify“>USD/JPY is little changed in general despite the dollar’s advance elsewhere, as buyers are still pensive in chasing a move too close to 145.00. Something, something Icarus flying too close to the Sun.</p><p style=““ class=“text-align-justify“>Against the commodity currencies, the dollar’s gains are more profound with USD/CAD up 0.5% to 1.3745 and AUD/USD down 0.6% to 0.6460 currently. That comes despite a slightly better appetite in the equities space, with stocks holding slight gains on the day. That said, the optimism has been watered down with S&P 500 futures now just up 0.1% after having been up by as much as 0.8% earlier.</p><p style=““ class=“text-align-justify“>Month-end and quarter-end trading will keep things a bit tricky before the weekend, alongside US PCE data and the UoM survey later on.</p>

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

<p style=““ class=“text-align-justify“>Just a heads up that the meeting will take place on 5 October next week. And in all likelihood, the bloc is likely to lean towards a 1 mil bpd cut in production – at least that was the number floated around over the past week or so among OPEC+ watchers.</p>

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

<p style=““ class=“text-align-justify“>The dollar is gaining modest ground on the day now as it sits higher against almost all major currencies, with only the yen keeping pace against the greenback. That is more of an exception as USD/JPY continues to keep below 145.00 amid intervention fears by Japanese authorities again.</p><p style=““ class=“text-align-justify“>The pound has slipped to a low of 1.1077, down from a high of around 1.1235 earlier, as the volatile swings continue and after the OBR was not asked to alter the timeline of its fiscal forecasts – which will be published on 23 November.</p><p style=““ class=“text-align-justify“>Elsewhere, EUR/USD is down 0.5% to 0.9763 while USD/CAD is up 0.2% to 1.3710 currently. The antipodeans are marked lower with AUD/USD down 0.4% to 0.6475 and NZD/USD down 0.6% to 0.5685 on the day.</p><p style=““ class=“text-align-justify“>The push higher in the dollar comes after a choppy period in European trading earlier but also against the backdrop of mixed market moves with month-end and quarter-end in focus.</p><p style=““ class=“text-align-justify“>Equities are holding higher with S&P 500 futures up 23 points, or 0.6%, on the day while 10-year Treasury yields are down 6 bps to 3.686% currently. This sort of scattered conviction screams flow-based movement and we might not get a clear read on things until next week when the new week/month/quarter begins.</p>

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

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This article was written by ForexLive at forexlive.com.

<ul><li>Talked about economic, fiscal outlook</li><li style=““ class=“text-align-justify“>Our forecasts will be based on independent judgment about economic, fiscal prospects</li></ul><p style=““ class=“text-align-justify“>As expected, there is no change to the government’s policy. As such, the forecasts and fiscal statement in November will end up being the next point of scrutiny for the gilts market when the time comes.</p>

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

<ul><li>Prior +7.9%</li><li>CPI +1.9% vs +1.3% m/m expected</li><li>Prior +0.3%</li><li>HICP +10.9% vs +10.0% y/y expected</li><li>Prior +8.8%</li><li>HICP +2.2% vs +1.3% m/m expected</li><li>Prior +0.4%</li></ul>

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-pm-truss-we-are-not-the-only-ones-facing-difficulties-it-is-a-global-problem-20220929/“>UK PM Truss: We are not the only ones facing difficulties, it is a global problem</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/pboc-reportedly-called-major-state-owned-banks-to-stock-up-for-yuan-intervention-20220929/“>PBOC reportedly called major state-owned banks to stock up for yuan intervention</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-kazaks-a-weak-euro-does-not-help-with-inflation-20220929/“>ECB’s Kazaks: A weak euro does not help with inflation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-rehn-significant-rate-hikes-are-needed-in-the-coming-meetings-20220929/“>ECB’s Rehn: Significant rate hikes are needed in the coming meetings</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-rehn-small-rate-hikes-arent-enough-in-the-current-situation-20220929/“>ECB’s Rehn: Small rate hikes aren’t enough in the current situation</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/ecbs-mller-too-early-to-say-how-much-to-hike-in-october-20220929/“>ECB’s Müller: Too early to say how much to hike in October</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-simkus-my-choice-would-be-to-hike-by-75-bps-20220929/“>ECB’s Simkus: My choice would be (to hike by) 75 bps</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/centralbank/ecbs-de-cos-qt-could-potentially-cause-market-turmoil-in-certain-segments-20220929/“>ECB’s de Cos: QT could potentially cause market turmoil in certain segments</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/saxony-september-cpi-92-vs-73-yy-prior-20220929/“>Saxony September CPI +9.2% vs +7.3% y/y prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/bavaria-september-cpi-108-vs-84-yy-prior-20220929/“>Bavaria September CPI +10.8% vs +8.4% y/y prior</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/spain-september-preliminary-cpi-90-vs-101-yy-expected-20220929/“>Spain September preliminary CPI +9.0% vs +10.1% y/y expected</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/france-considers-power-cuts-for-parts-of-the-country-on-a-rotating-basis-report-20220929/“>France considers power cuts for parts of the country on a rotating basis – report</a></li></ul><p>Markets:</p><ul><li>USD leads, CAD lags on the day</li><li>European equities lower; S&P 500 futures down 0.7%</li><li>US 10-year yields up 12 bps to 3.825%</li><li>Gold down 0.6% to $1,650.23</li><li>WTI crude up 0.3% to $82.38</li><li>Bitcoin down 0.5% to $19,467</li></ul><p style=““ class=“text-align-justify“>After broad relief was seen in markets yesterday, we are seeing a return to old habits as bonds are selling off a fair bit while the dollar is running higher and equities are pushing lower. UK prime minister, Liz Truss, came out to defend the government’s policy plans and batted away any suggestions of U-turn in fiscal action.</p><p style=““ class=“text-align-justify“>Despite some nervous ticks higher in bond yields, 30-year gilt yields are little changed around 3.93% on the day. However, there is a notable selloff in Treasuries across the curve with 2-year yields up 11 bps to 4.20% and 10-year yields up 12 bps to 3.82%.</p><p style=““ class=“text-align-justify“>That kept the pressure on equities with US futures pushing lower after a solid bounce yesterday. S&P 500 futures are down 0.7% while European indices are also pressured lower as German inflation looks set to come in above 10% in September.</p><p style=““ class=“text-align-justify“>The dollar remains in a decent spot, recovering losses from yesterday as GBP/USD was pushed lower by 1% to 1.0765 initially before paring that loss and keeping around 1.0840-70 levels for the time being.</p><p style=““ class=“text-align-justify“>USD/JPY continues to keep buoyant, just below 145.00 with buyers slowly taking aim at the figure level again despite intervention fears. Meanwhile, EUR/USD was initially dragged down to a low of 0.9635 before holding at its 100-hour moving average and rebounding now to near unchanged levels at 0.9730.</p><p style=““ class=“text-align-justify“>Commodity currencies continue to stay under pressure with USD/CAD up 0.4% to 1.3660, though off earlier highs of 1.3755. Then, AUD/USD is down 0.3% to 0.6500 but at least moving off its low earlier as well at 0.6435 as the dollar gives a little bit back.</p><p style=““ class=“text-align-justify“>A report on the PBOC potentially intervening is also something to take note of, taking away part of the dollar’s tailwind with month-end trading also in focus.</p>

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

<p style=““ class=“text-align-justify“>Just a heads up on this after the government has decided not to go through with a gas levy in fears that it will fuel a further price increase. A source earlier said that lawmakers have agreed to a significant but „responsible“ spending in dealing with the matter.</p>

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

<ul><li>Rate hikes by major central banks raises recession risks</li><li>A big step in October is appropriate</li><li>ECB should start discussing QT now</li></ul><p style=““ class=“text-align-justify“>There’s a mix of comments in there but nothing that we don’t already know as being part of the ECB’s position at the moment. Policymakers from the central bank are out in droves today but the overall communique is clear i.e. 50 bps rate hike is the minimum for October but there’s a likelihood of raising by 75 bps as well.</p>

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

<p style=““ class=“text-align-justify“>I’m not seeing any notable headline driving the move as this looks like just another swing in volatility for the pound this week. There is some notable short-term resistance just above 1.0900 but I would continue to pin the current range for the pair between 1.0600 and 1.1000 in the bigger picture.</p><p style=““ class=“text-align-justify“>The dollar continues to hold steady elsewhere, though gains have been pared slightly and not helped by this report <a target=“_blank“ href=“https://www.forexlive.com/news/pboc-reportedly-called-major-state-owned-banks-to-stock-up-for-yuan-intervention-20220929/“ target=“_blank“>here</a> as well, so this is more of a flow move in the pound. Broader <a target=“_blank“ href=“https://www.forexlive.com/terms/m/market-sentiment/“ target=“_blank“ id=“9c47bdfe-3721-43f4-97e8-fc0b97df4c60_1″ class=“terms__main-term“>market sentiment</a> also continues to be on edge with S&P 500 futures down 0.7%, European indices down roughly 1%, and bond yields pushing higher today. 10-year gilt yields are up 16 bps to 4.16% while 10-year Treasury yields are up 13 bps to 3.84% currently.</p><p style=““ class=“text-align-justify“>As for the pound, we heard from UK PM Truss that she’s not backing down from her recent policy initiatives and that is a clear signal for a couple of things.</p><p style=““ class=“text-align-justify“>If the gilt market continues to come under further pressure, it would require more effort by the BOE to try and restrain the market and provide more bailouts. In essence, it has to step in with some form of yield curve control.</p><p style=““ class=“text-align-justify“>That just points to further decimation for the pound on the balance of things and rightfully, it should require the government to be more fiscally responsible and embrace austerity. Otherwise, the contradicting policies between the government and central bank will just make for a disastrous recipe in terms of financial stability and confidence in the UK economy.</p>

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