<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.

<p style=““ class=“text-align-justify“>Alas, here we go? There have been back and forth reports since the morning as to whether she will have survived the day or if we will have to wait until after 31 October. But it seems like we are seeing things move quickly now, so let’s see how the events will unfold in the coming hours.</p><p style=““ class=“text-align-justify“>Mind you, this is not a planned meeting between the two. From the Daily Mail’s political editor:</p>

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

<p style=““ class=“text-align-justify“>I’m not seeing any specific headlines at least to have driven the move, with 10-year Treasury yields now turning on its head to be down 2 bps at 4.11%. It was up by over 4 bps earlier to 4.17% and the drive lower in yields is helping sentiment in equities as well for now.</p><p style=““ class=“text-align-justify“>S&P 500 futures have erased losses to turn flat, after having been down by about 0.5% earlier in the session. In turn, this is helping to see commodity currencies nudge up to fresh highs on the day.</p><p style=““ class=“text-align-justify“>USD/CAD is down 0.3% to 1.3723 with daily support around 1.3700 still a key area to watch technically. Meanwhile, AUD/USD is back up by 0.5% to 0.6300 as buyers seize back near-term control:</p><p style=““ class=“text-align-justify“>Short-term resistance around 0.6340-45 remains the key region limiting any topside move for the pair though.</p>

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

<ul><li style=““ class=“text-align-justify“>The justification for tighter policy is clear</li><li style=““ class=“text-align-justify“>Whether interest rates have to rise by as much as currently priced in financial markets remains to be seen</li><li style=““ class=“text-align-justify“><a target=“_blank“ href=“https://www.bankofengland.co.uk/-/media/boe/files/speech/2022/october/the-inflationary-consequences-of-real-shocksspeech-by-ben-broadbent.pdf?la=en&hash=40EE6F0A7FE902A87B1349A71B04FF37A2D62C74″ target=“_blank“ rel=“nofollow“>Full comments</a></li></ul><p style=““ class=“text-align-justify“>There’s a slight pullback on market pricing for the BOE after his comments but nothing too material. After all, the immediate outlook remains the more important one here and a 75 bps rate hike is fully priced in going into the 3 November policy decision. OIS swaps show that a 100 bps rate move is now seen roughly at 15%, down from 25% earlier.</p><p style=““ class=“text-align-justify“>As for his headline comment, he’s talking about when the bank rate moves to somewhere around 5.25% and how that will result in a cummulative drag of GDP by almost 5% under the entire tightening cycle. As if the central bank will keep tightening when the economy is in such utter shambles. Pfft.</p><p style=““ class=“text-align-justify“>/<a target=“_blank“ href=“https://www.forexlive.com/terms/g/gbp/“ target=“_blank“ id=“3a5ab7c1-ff09-45ea-87d4-eea6613bb754_1″ class=“terms__main-term“>GBP</a></p>

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

<p style=““ class=“text-align-justify“>As risk sentiment nudges lower again while Treasury yields keep higher, the dollar is finding fresh bids on the day in a push to the highs. EUR/USD is now down 0.9% to 0.9760 in a fall below its 100-hour moving average at 0.9791 and is now looking towards its 200-hour moving average at 0.9755 next:</p><p style=““ class=“text-align-justify“>A push below the latter will see sellers resume near-term control and price will look towards the 13 October low at 0.9631 next before turning towards 0.9600 again.</p><p style=““ class=“text-align-justify“>Meanwhile, GBP/USD is also declining further after its earlier fall below the 100-hour moving average. The pair now looks towards 1.1200 with the 200-hour moving average at 1.1180 also in focus:</p><p style=““ class=“text-align-justify“>Much like the EUR/USD, the pair is also seeing the near-term bias now shift to be more neutral. And a push below the 200-hour moving average (blue line) will give sellers room to roam back towards 1.1000 next.</p><p style=““ class=“text-align-justify“>Elsewhere, USD/JPY remains perky in a run to 149.70, up 0.3% on the day, as it continues to <a target=“_blank“ href=“https://www.forexlive.com/news/usdjpy-nudges-closer-towards-intervention-trigger-20221019/“ target=“_blank“>flirt with a potential intervention trigger</a> ahead of the 150.00 mark.</p><p style=““ class=“text-align-justify“>Looking over to commodity currencies, they are moving back to the lows for the day as equities retreat ahead of US trading. S&P 500 futures are now down 12 points, or 0.3%, and that is seeing the loonie, aussie, and kiwi nudge lower. USD/CAD is up 0.4% to 1.3790 while AUD/USD is falling by 0.5% to 0.6280 and threatening a fall below its key hourly moving averages at 0.6282-94. For the latter, a break below the near-term support in that region will allow for another run at 0.6200 for sellers.</p>

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

<ul><li>I am sorry and have made mistakes</li><li>It is right to make changes to economic approach</li><li>Spending will go up next year and the year after</li></ul><p style=““ class=“text-align-justify“>It’s quite a feisty session this one as she is brutally attacked by Starmer, as you would expect though. You can watch it <a target=“_blank“ href=“https://www.youtube.com/watch?v=NT14sw0_RRc“ target=“_blank“ rel=“nofollow“>here</a>.</p>

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

<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.