<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.

<p style=““ class=“text-align-justify“>That’s a step up though from the supposed previously discussed price cap of around $40 and $60 per barrel but still, the news is dampening sentiment in the oil market. WTI crude is down from $81.30 to near $80 currently, down over 1% on the day now.</p>

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

<p style=““ class=“text-align-justify“>However, there is still some ways to go before we reach the issuance point with the report suggesting that the BOJ intends to decide on whether to issue a digital currency only in 2026 – after conducting verifications for two years. On the trial, the central bank is to cooperate with private sector banks and others starting from spring next year to verify whether there are any issues with bank account deposits and withdrawals.</p>

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

<p style=““ class=“text-align-justify“>European indices are slightly higher, with the gains carrying over from the optimism in Wall Street yesterday. US futures are more tentative, with S&P 500 futures seen up just 6 points, or 0.15%, currently. For equities, overall sentiment remains more or less the same as last week with the S&P 500 index itself still caught in between its 100 and 200-day moving averages:</p><p style=““ class=“text-align-justify“>Meanwhile, 10-year Treasury yields are flat today around 3.76% with there being little appetite to go running before the Fed minutes later today.</p><p style=““ class=“text-align-justify“>In the major currencies space, the dollar is still mostly little changed with EUR/USD trading back down to 1.0305-10 at the moment. The pair is gyrating towards large option expiries with the key near-term levels pointed out <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-still-stuck-at-the-checkpoint-20221123/“ target=“_blank“>here</a> still holding as well. USD/JPY is up 0.2% to 141.50 but GBP/USD is up 0.2% to 1.1905, though the changes don’t mean too much.</p><p style=““ class=“text-align-justify“>Overall, all of this points to a more tentative mood in markets as we await some economic releases in the US later. If that fails to liven things up, there might not be much else to work with amid the Thanksgiving holiday before the weekend.</p>

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