• USDIndex – Holds Friday’s range at 111.80. Dollar remains in demand following a weak 3rd quarter, HOT CORE CPE inflation on Friday and an emergency FOMC meeting  behind closed doors today. Asian stock markets struggle in key Holiday week, risk appetite remains fragile ahead of more rate hikes and US jobs on Friday. The JPY underperforms in the Asian session.  
• EUR – Trades at 0.9820 now, capped by an 8-day high at 0.9900 but off last weeks 0.9550 low. Alternative gas supplies began to flow over weekend for Greece, Bulgaria & Poland.
• JPY –  Remains weighed as 145.00 is tested once more. Fin. Min. Suzuki –  Japan stood ready for “decisive” steps in the foreign exchange market if excessive Yen moves persisted.
• GBP continued to recover following mini-budget inspired collapse last week. Capped at 1.1200 so far today ahead of Fin Min Kwartang’s speech. Rumours swirl of U-turns on tax cuts. 
• Stocks US stocks moved lower again on Friday remain pressured. Third Consecutive Quarterly fall, Largest percentage fall for Q3 in the S&P500 in 20 years, 3rd consecutive week lower and 2nd consecutive month lower.  The first 9-months of 2022 has been the worst since 2008.  APPL, MSFT lead tech lower on Friday, biggest losers Nike -12.8% & Carnival -23.3% both following warnings regarding margins due to inflation. Q3 Earnings now expected to be +4.5% down from 11.1% on July 1.

• USOil rallied over 3% to test $82.00 after weekend reports of OPEC+ cutting production “up to 1.5 million barrels per day”.
• Gold – holds at $1665 but remains and capped at $1675.
• BTC – rejected $20.0k on Friday and trades at $19.2k now.

Today  EZ, UK & US Final Manufacturing PMI, US ISM Manufacturing, Speeches from Fed’s Bostic, Barkin, George & Williams, BoE’s Mann & UK Chancellor Kwarteng.

Week Ahead – US Services,  RBA & RBNZ Rate decisions, ADP & CAD & US (NFP) Jobs

Biggest FX Mover @ (06:30 GMT) NZDJPY (+0.82%) Rallied from Friday’s collapse from 83.00 to 81.00, to test 82.00 today. MAs now aligning higher,  MACD histogram & signal line negative but rising, RSI 52.05 & rising, H1 ATR 0.253, Daily ATR 1.233.

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Stuart Cowell

Head Market Analyst

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