Forex News from InstaForex

[IFX Gertrude]

US stocks closed lower, Dow Jones down 1.71%



At the close of the New York Stock Exchange, the Dow Jones fell 1.71% to hit a 52-week low, the S&P 500 fell 1.51% and the NASDAQ Composite fell 1.51%.

Shares of UnitedHealth Group Incorporated were among the leaders of gains among the components of the Dow Jones index today, which lost 3.79 points (0.74%) to close at 505.04. Walgreens Boots Alliance Inc fell 0.15 points or 0.48% to close at 31.40. Dow Inc shed 0.23 points or 0.52% to close at 43.93.

The drop leaders were Nike Inc shares, which lost 12.21 points or 12.81% to end the session at 83.12. Boeing Co was up 3.39% or 4.25 points to close at 121.08, while Walt Disney Company was down 3.20% or 3.12 points to close at 94. 33.

Leading gainers among the S&P 500 index components in today's trading were Charles River Laboratories, which rose 3.57% to hit 196.80, Weyerhaeuser Company, which gained 2.92% to close at 28.56, and shares of Twitter Inc, which rose 2.74% to end the session at 43.91.

The losers were shares of Carnival Corporation, which fell 23.31% to close at 7.03. Shares of Norwegian Cruise Line Holdings Ltd lost 18.11% to end the session at 11.35. Quotes of Royal Caribbean Cruises Ltd decreased in price by 13.14% to 37.91.

Leading gainers among the components of the NASDAQ Composite in today's trading were FingerMotion Inc, which rose 82.16% to hit 3.37, SAITECH Global Corp, which gained 43.36% to close at 3.24, and shares of Avenue Therapeutics Inc, which rose 39.03% to end the session at 10.08.

The biggest losers were Atlis Motor Vehicles Inc, which shed 39.91% to close at 20.40. Shares of Aterian Inc lost 37.06% and ended the session at 1.24. Quotes of Edesa Biotech Inc decreased in price by 34.66% to 0.92.

On the New York Stock Exchange, the number of securities that fell in price (1,758) exceeded the number of those that closed in positive territory (1,354), while quotations of 117 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,139 companies fell in price, 1,583 rose, and 228 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.69% to 31.62.

Gold futures for December delivery added 0.11%, or 1.80, to $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 1.87%, or 1.52, to $79.71 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 1.86, to $85.32 a barrel.

Meanwhile, in the Forex market, the EUR/USD pair remained unchanged 0.08% to 0.98, while USD/JPY advanced 0.23% to hit 144.77.

Futures on the USD index fell 0.09% to 112.10.

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[IFX Gertrude]

USD/JPY: May the force be with you!



Yesterday, bulls again pushed the USD/JPY pair above the key 145 mark, but failed to gain a foothold there. The yen turned out to be a tough nut to crack, which is still too tough for the dollar bulls.

For a penny of ammunition, for a fragment of ambition

Trampling the USD/JPY pair, which lasted all last week, unexpectedly gave way to a decisive upward movement on Monday morning.

Lacking a new fundamental catalyst, the dollar miraculously managed to hit the 145 peak it tested in September again.

Recall that the last time this barrier was captured turned out to be a disaster for the greenback. In response to the strong fall of the yen, the Japanese authorities carried out the first intervention in 24 years to support their national currency.

Having touched a potentially dangerous line, this time the greenback was more cautious and without intervening in the market, it bounced back as if scalded.

This served as yet another confirmation that USD/JPY bulls are still wary of intervention and do not want to draw fire on themselves.

Of course, the dollar still has a strong amulet in its pocket that will almost save it from a steep plunge. We are talking about the growing monetary divergence between the US and Japan.

But the market is well aware that this is no longer enough for the USD to rise. With the Japanese government continuing to threaten to intervene again, the dollar needs a big boost in the form of strong economic data.

A strong US economy will definitely allow the Federal Reserve to satisfy all its hawkish ambitions, and weak macroeconomic statistics, on the contrary, will prevent this.

Recall that at the September meeting, the US central bank raised interest rates by 75 bps and reaffirmed its willingness to raise the rate more aggressively if inflation continues to be high.

Nevertheless, many analysts believe that the 75 bps step is the ceiling for the Fed. The US central bank is unlikely to decide on anything more, given the uneven economic data.

This opinion was supported by the latest index of business activity in the US manufacturing sector. The ISM reported a reading of 50.9 in September, lower than its forecast of 52.2.

After the release of pessimistic statistics, the yield on 10-year US bonds fell by 14 basis points to 3.66%, and the dollar significantly fell.



Flat may drag on

Today's portion of US economic data is also unlikely to please the USD/JPY bulls. Tuesday's key report will be the release of the index of business activity in the services sector from ISM.

Economists forecast a decline in September to 56 compared to the previous value of 56.9.

The data on the index of new orders for the last month may also turn out to be weak. The indicator is expected to fall to 58.9 against 61.8 recorded in August.

Preliminary estimates are putting significant pressure on the dollar-yen this morning as it struggles to break out of the consolidation phase to try again to break through the defenses at the psychologically important 145 mark.

At the time of release, the quote jumped almost 0.2% and traded around 144.80.

The trigger for the asset was a dovish statement by Japanese Prime Minister Fumio Kishida. The day before, the official said that the government will continue to stimulate the economy, while trying to make the most of the weak yen.

The geopolitical factor also provided significant support to the dollar - the escalation of tension between Japan and North Korea.

At the beginning of the day, it was reported that Pyongyang, which had already tested an unprecedented number of missiles this year, had fired another short-range ballistic projectile.

This time, the target of the North Korean military appeared to be the Hokkaido area, which is considered the second largest Japanese island.

In response to the missile launch over Japan, the Hokkaido authorities issued an air raid alert and urged the people of the region to take shelter.

Meanwhile, Japanese Defense Minister Yasukazu Hamada has signaled that Tokyo is considering all options for strengthening its defenses, including a counterattack.

If the conflict between the countries continues to escalate, the Japanese yen may weaken even more. In this case, bulls on the USD/JPY pair will finally have a real chance to settle above the 145 level.

However, we recommend that traders do not force things yet and be patient, especially since most forecasts for the USD/JPY pair point to further movement in the flat.

Most likely, in the coming days, the dollar and the yen will continue to pull the price rope in the 144-145 range.

Technical picture for the USD/JPY pair

The short-term trend is neutral, but has a tendency to the downside. As the quote fell below the 20-, 50- and 100-EMAs yesterday, this could spell further losses.

If the bears manage to take the asset below 144, this will open a fast route to 143.90.

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[IFX Gertrude]

European stocks decline after previous sharp rise

On Wednesday, key European stock indices declined dramatically amid the release of fresh statistics on the EU countries. At the same time, stock indexes have been actively rising over the last three sessions and closed Tuesday's trading with a record six-month gain.



By the time of writing, the STOXX Europe 600 index of Europe's leading companies had dropped by 0.9% to 399.40 points.

Meanwhile, the French CAC 40 fell by 0.73%, the German DAX lost 0.79%, and the British FTSE 100 declined by 1.15%.

Top gainers and losers

The stock price of Britain's largest grocery retailer Tesco Plc rose 2.5% despite a 2.8-fold decline in pre-tax profits in the January-June 2023 fiscal year. In addition, the day before, the company worsened its full-year outlook due to changing consumer behavior and continued uncertainty in the trading environment amid record inflation.

The Finnish airline Finnair rose 1.2%. Earlier the company reported that it carried 890,500 passengers last month, 1.1% more than in August. At the same time, in September 2021, the number of Finnair passengers was only 298.2 thousand.

The market capitalization of the Danish manufacturer of audio systems and other electronics Bang & Olufsen A/S fell by 2.6%. The company's revenue fell by 8.2% in the first fiscal quarter.

Share price of the Swedish Avanza Bank Holding dropped by 6.4%.

The stock price of French auto parts supplier Faurecia SE dropped 6.2%.

Swedish cloud technology provider Sinch AB soared by 9.7%.

Meanwhile, the market capitalization of the Swedish airline SAS AB is steadily increasing. Earlier, the company's management announced about the changes in the contracts with 10 lessors providing 36 aircraft. According to the preliminary expectations of the SAS AB management, it will help to save about $700 million a year by 2026. Market sentiment

The focus of European investors on Wednesday is fresh statistics on the region. So, according to the final estimation of experts, in September the business activity composite index (PMI) in industry and services of 19 Eurozone countries was 48.1 points down from 48.9 points in August. Meanwhile, earlier the market forecasted the decrease of the index down to 48.2 points only.

The final September PMI was the lowest in two years and eight months. Traditionally the value of business activity composite index in industry and services above 50 points indicates an increase in economic activity, below its decline.

In addition, on Wednesday morning S&P Global reported that the euro region's services purchasing managers' index was 48.8 points for the month, compared to August's 49.8 points. The September total was the lowest since February 2021. At the same time analysts predicted a less noticeable decrease in the index - down to 48.9 points. By the way, the fall of purchasing managers indicator in the services sector below 50 points traditionally indicates a decrease in business activity in the sector.

Meanwhile, in Italy PMI in the service sector fell to 48.8 points in September from 50.5 points in August, in Germany - to 45 points from 47.7 points. Meanwhile, in France the index rose last month to 52.9 points from August's 51.2 points.

Germany's foreign trade surplus decreased to 1.2 billion euros in August from 13.7 billion euros registered a year before and 3.4 billion euros in July. This tangible reduction in the country's trade surplus was a striking signal of a slowdown in external demand for goods produced by Germany's key manufacturing sector.

The volume of German exports in September, adjusted for calendar and seasonal factors, rose by 1.6% (EUR 133.1 billion) compared to August.

Meanwhile, imports rose 3.4% to €131.9 billion. Meanwhile, industrial production in France soared 2.4% in August compared to July's drop of 1.6%. At the same time the August figure was the highest since January 2021.

Previous trading results

On Tuesday, European stock indices closed in the green zone, gaining within 4%.

Thus, the composite indicator of Europe's leading companies STOXX Europe 600 rose by 2.01% to 403.03 points. By the way, the index exceeded 400 points for the first time since September 22.

The French CAC 40 advanced by 4.24%, the German DAX gained 3.78% and the British FTSE 100 added 2.57%.

The value of shares of the German automobile concern Volkswagen rose by more than 1%. The day before, the head of Volkswagen Oliver Blumet told local media that he plans to lead all subsidiaries to an IPO after the success of the initial public offering of Porsche.

Quotes of the Swiss banking group Credit Suisse Group AG soared by 8.9%, recovering from a 9% plunge the day before. The key pressure factor for the shares of Credit Suisse on Monday was the announcement of the bank's management that it is considering cutting 1,000 jobs over the next few years as part of a new anti-crisis program. The business reorganization plan will be unveiled at the end of October.

The market capitalization of the British insurance company Legal & General Group rose by 5.9% on the report of further support for pension fund clients affected by the sharp rise in interest rates.

The share price of British bakery chain Greggs PLC strengthened 10% on total sales, which rose 14.6% year-over-year during the past quarter.

Swiss vacuum equipment maker VAT Group AG gained 6.9 percent.

Quotes of the French IT company Atos SE rose by 6.8%.

The market capitalization of Made.Com, an online furniture retailer, soared more than 20% on news that its management had begun negotiations with "a number of interested parties" about selling the company.

The share price of Swiss chemical group Sika AG soared 6% on the back of an improvement in its revenue forecast for 2022.

The value of securities of Spanish banks Santander, BBVA and Caixabank rose by more than 7%.

Quotes of the British marketing company S4 Capital increased by 10%.

Market capitalization of Norwegian fish company SalMar ASA dropped by 10.3%.

The main factor of growth for the European stock exchanges on Tuesday was a strong outcome of the last trading session on the U.S. stock market. Thus, The Dow Jones Industrial Average gained 2.7% in the first trading session of the fourth quarter, reaching a February high. Meanwhile, the S&P 500 Index gained 2.59% and the NASDAQ Composite gained 2.27%.

In addition, Asian indices were up significantly the day before, as the Hong Kong stock exchange opened after a holiday.

Experts attribute the surge of optimism in the European stock markets the previous day to the weakening of investors' concerns over the further aggressive monetary policy of world central banks. The high recession risks for the global economy, analysts say, may force the regulators to follow a softer course.

According to the statistics published on Monday, the index of business activity in the manufacturing sector in the United States in September fell to its lowest level of May 2020. This state of affairs was perceived by investors as confirmation that monetary tightening by the Federal Reserve is beginning to suppress economic activity.

Meanwhile, the ISM Manufacturing index fell to 50.9 points last month from August's 52.8 points, according to data from the Institute for Supply Management (ISM). At the same time, the market on average expected the index to fall only to 52.2 points.

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[IFX Gertrude]

US stocks closed lower, Dow Jones down 0.14%



At the close of the New York Stock Exchange, the Dow Jones fell 0.14%, the S&P 500 fell 0.20%, and the NASDAQ Composite fell 0.25%.

The leading performer among the components of the Dow Jones index today was Nike Inc, which gained 2.46 points or 2.78% to close at 91.10. Visa Inc Class A rose 2.02 points or 1.09% to close at 187.67. UnitedHealth Group Incorporated rose 3.90 points or 0.75% to close at 527.07.

The biggest losers were Goldman Sachs Group Inc, which shed 5.87 points or 1.86% to end the session at 309.00. Shares of JPMorgan Chase & Co rose 1.38 points (1.23%) to close at 110.39, while Dow Inc shed 0.56 points (1.20%) to close at 46 .06.

Leading gainers among the S&P 500 components in today's trading were Illumina Inc, which rose 6.56% to hit 218.52, Schlumberger NV, which gained 6.26% to close at 41.57, and Gap Inc, which rose 5.19% to end the session at 9.72.

The biggest losers were Lumen Technologies Inc, which shed 9.45% to close at 7.28. Shares of Enphase Energy Inc shed 9.25% to end the session at 261.60. Quotes Vornado Realty Trust fell in price by 6.38% to 22.47.

The leading gainers among the components of the NASDAQ Composite in today's trading were Chardan Nextech Acquisition 2 Corp, which rose 102.63% to hit 21.54, Nauticus Robotics Inc, which gained 96.27% to close at 6.32. , as well as shares of Pineapple Holdings Inc, which rose 93.01% to end the session at 2.76.

The biggest losers were Bit Brother Ltd, which shed 42.97% to close at 0.18. Shares of Avenue Therapeutics Inc shed 41.59% to end the session at 8.47. Quotes Scienjoy Holding Corp fell in price by 36.99% to 1.38.

On the New York Stock Exchange, the number of securities that fell in price (2102) exceeded the number of those that closed in positive territory (991), while quotes of 107 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,313 companies fell in price, 1,443 rose, and 198 remained at the level of the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 1.79% to 28.55.

Gold futures for December delivery shed 0.28%, or 4.90, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery rose 1.76%, or 1.52, to $88.04 a barrel. Futures for Brent crude for December delivery rose 2.07%, or 1.90, to $93.70 a barrel.

Meanwhile, in the Forex market, EUR/USD fell 0.96% to hit 0.99, while USD/JPY edged up 0.35% to hit 144.60.

Futures on the USD index rose 1.00% to 111.08.

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[IFX Yvonne]

EUR/USD. Bearish cocktail for the euro



The contradictory dynamics of the euro is somewhat alarming. Despite the unfavorable picture of the eurozone with pessimistic data and forecasts, where the cherry on the cake is the energy crisis, the single currency looks quite stable. Should we wait for lows at the level of 1.9000?
The German authorities reported unpleasant economic forecasts. A recession is expected in the country next year. The GDP of the European economy, according to the preliminary autumn estimates of the government, will decrease by 0.4% in 2023.
In addition, the growth forecast for 2022 was lowered to 1.4%. Inflation will be 7.9% this year and will reach 8% in 2023. The figures are not final, adjustments may be made next week, the government said in a statement.
Retail sales in the eurozone sank by 0.3% on a monthly basis in August against the expected 0.4%. On an annualized basis, the indicator fell by 2%, which is higher than the forecast value of 1.7%.



Both macroeconomic factors did not cause an immediate reaction in the euro, which continued to trade with small losses on Thursday. The decline of the EUR/USD pair intensified only in the US session amid a growing dollar index.
What is the reason for the paradoxical stability of the euro?
At the beginning of the week, there was a clear rebound from the lows as a result of the emerging risk appetite. Bulls on EUR/USD aiming to break through the parity upward. Everything seems to be logical, but... At this point, other currencies such as the Canadian, Australian, New Zealand dollars and even the Swiss franc could not recoup, that is, they almost did not rise against the dollar.
It turns out this way: when the dollar rose, the euro fell slower than other currencies, and when the dollar adjusted down, the euro grew most vigorously. Although the same Canadian dollar had a good factor for recovery in the form of a sharp rise in oil prices.
The behavior is strange, however, it does not change the overall picture for the euro. From the point of view of the trade balance, budget stability, the level of public debt to GDP and taking into account the high risks of recession, the euro still looks weaker than other currencies of developed countries.
If, as a result, the recovery in the markets resumes, the euro should not be ahead of everyone, but behind. The future of the bloc does not bode well for the single currency – a recession and a debt crisis are on the horizon.
Yes, the euro has recently received support due to harsh statements by representatives of the European Central Bank, but this phenomenon is temporary. It is not a fact that the central bank will decide to raise the rate by 75 bps at the October meeting. Maybe it will cost a step of only 50 bps.
If inflation does push the ECB to tighten policy more aggressively, then the question will arise about government debt yields. The national debt of Italy, as you know, is a time bomb that will explode according to the Greek scenario. Last week, yields on Italy's 10-year debt tested the peaks since 2013 at 4.8%. Then they rolled back, then went up again. The moral is that as a result it will be possible to see at least 5%.
If we turn to history, the euro's fall amid the debt crises has always been significant. Economists, analysts and strategists each time started talking about the possible collapse of the euro bloc. This was the case during the Greek crisis, when the euro collapsed from the area of 1.4000 to 1.2000.
Now everything starts in a new circle of the current Italian scenario. It is possible that once again they will begin to "bury" the eurozone, especially since Italian problems are much more dangerous than Greek or Spanish ones and occur at such a difficult time for the world as a whole.
Forecast
The EUR/USD pair is highly likely to test the 0.9500 level, and even the growth of risk appetite is not an ally here.
The eurozone is on the verge of recession, the deepest recession is expected in the winter months, so the EUR/USD pair may well aim for the level of 0.9000.
"Three-quarters of negative growth and the still hawkish position of the Fed is a strong bearish cocktail for EUR/USD," according to ING economists, who also adhere to the scenario of a drop in the quote in the area of 0.9000.
"The increase in gas prices this winter will put pressure on the trade balance of the eurozone. This could lead to the euro falling to the lower limit of the 0.9000-0.9500 range over the next three or six months," ING predicts.
A potential reversal is possible in 2023 if the Federal Reserve starts to stick to dovish rhetoric, and the eurozone comes out of recession.

[IFX Gertrude]

Forex Analysis & Reviews: Forecast for GBP/USD on October 10, 2022

On Friday, the British pound opened and closed below the technical level of 1.1170. Now the 1.0828 target is available. The signal line of the Marlin Oscillator also looks fixed below the zero line, in the downward trend zone. Consolidation under 1.0828 will open the second target at 1.0535.



A factor that could postpone the pound's decline is tomorrow's employment data in the UK, which, with the expected maintenance of the unemployment rate at 3.6%, may show an improvement in the employment structure, including wage growth.



The price reached the MACD line and stayed there on the four-hour timescale. The technical price level (1.1170) is pressing on the price from above, so the lateral price movement is unlikely to be long. With the departure of the quote under Friday's low at 1.1055, the movement to 1.0828 will begin.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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[IFX Gertrude]

The pound does not hold back despair amid a strong dollar and sad forecasts



An important report on the labor market in the United States turned out to be quite strong, because experts' expectations of a weekly loss of the pound against the dollar and euro were being fully realized on Friday.

By the end of the trading day on Friday, the GBP/USD pair was trading at around 1.1103, declining in value by 0.51% under considerable pressure from various factors.

There are no important events in the domestic economic calendar of the UK yet that can give sterling another strong support. Events such as the Bank of England's next interest rate decision and the announcement of the government's budget plan will hit investors only in November. Therefore, the pound's movements on Friday and probably for some time to come will depend entirely on the subtle moods of investors.

According to the released data, the unemployment rate in the United States fell from 3.7% in August to 3.5% in September, and job growth was slightly higher than expected. And this is despite all of the Federal Reserve's efforts to slow down demand. The number of vacancies at the end of last month increased by 263,000, although most analysts predicted an increase of 250,000.

Apparently, the labor market in the world's largest economy is still tense, which means that the Fed has not had any good reasons to move away from its policy of a sharp rate hike. Although many experts fear that such a decisive position of the Fed will not just "cool" the country's economy, but also plunge the US into a deep recession. Nevertheless, the probability that in November the US central bank will implement another rate hike by 0.75 percentage points is all 83%.

Amid all these expectations, the pound found no reason to hold positions and was noticeably weakening against major world currencies. Not having had time to really recover from the extreme volatility caused by the mini-budget of Kwasi Kwarteng, sterling continues to sink under the dominance of the dollar.

The dollar index, which tracks its exchange rate against a basket of six key currencies, was almost invariably trading at 112.34 by 16:00 London time.

In addition to the strong dollar, sterling is under considerable pressure due to data that showed a clear slowdown in the UK economy.

The pound also had to face the first warning from National Grid. The company warns that in the coming winter it will most likely have to introduce rolling power outages in the UK. If Russian gas supplies to the country do not resume, and the temperature begins to fall below the usual level, then the threat from National Grid will become a terrible reality for the United Kingdom.

In addition, the international rating agency Fitch has changed the outlook for the UK's long-term rating to the status of "negative", although the country previously had the status of "stable". Actually, it's not surprising, given the rather risky plans of the government to reduce taxes. It is already obvious that such a plan of the authorities will lead to an increase in public debt. At the same time, the rating itself was confirmed at the "AA" level.

According to experts at Fitch, in the absence of compensating measures, the UK government budget deficit will amount to 7.8% of GDP by the end of this year. And next year this deficit will grow to 8.8%. At the same time, the average budget deficit for countries with an AA rating is about 2% of GDP.

It is expected that inflation in the UK at the end of 2022 will be 8.9%, and then will gradually decline and by the end of 2024 will reach the level of 3.5%. But even in this case, the inflation rate will be higher than the target of 2%.

Earlier this week, S&P Global Ratings also changed the outlook for the UK's long-term rating to the status of "negative", thereby confirming the country's rating at the level of "AA".

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[IFX Gertrude]

European stock market falls after the collapse of Asian stock exchanges

On Monday, the leading stock indicators of Western Europe show a decline against the background of the negative dynamics of stock exchanges in the Asia-Pacific region. The general pessimism on the world markets was also provoked by investors' concern about further tightening of the monetary policy of the US Federal Reserve in the context of permanently rising inflation. In addition, the tense situation in Ukraine has returned to the agenda.



Thus, at the time of writing, the composite index of the leading companies in Europe STOXX Europe 600 sank by 0.68% - to 389.21 points, reaching a weekly low.

Meanwhile, the French CAC 40 shed 0.53%, the German DAX rose a symbolic 0.05% and the UK FTSE 100 shed 0.45%.

Rising and falling leaders

The value of securities of the French oil and gas company TotalEnergies SE sank by 1.5%. On the eve of the company's management proposed to organize annual negotiations on employee salaries with trade unions in France ahead of the scheduled date, provided that strikes at refineries are completed

The quotes of the British online retailer THG PLC fell by 7.8%.

The market capitalization of the German energy company Uniper SE decreased by 7.5%.

The share price of the Austrian manufacturer of sensors, semiconductor components and lighting equipment ams-OSRAM AG fell by 6.7%.

The value of the securities of the French automotive corporation Renault SA sank by 3.1% after the company's management confirmed that it was negotiating an alliance with Japanese Nissan about future investments in Renault's new electric vehicle business.

Quotes of the French bank Societe Generale SA rose by 0.8% on the news that the company's chief operating officer, Gall Olivier, will leave his post at the end of 2022 due to management reshuffles.

Market sentiment

The focus of attention of participants in the European stock market on Monday is concerns about the consequences of rocket attacks in Ukraine over the weekend. In addition, investors continue to worry about the decisive steps of the world's central banks in the field of monetary policy.

So, this morning it became known that the Bank of England will increase the maximum volume of daily auctions for the redemption of government bonds under the temporary program. The British central bank announced the start of the program on September 28.

At the same time, the British central bank plans to fully complete the repurchase of government securities on Friday, October 14. Since the launch of the program, the BoE has held 8 auctions. In total, the central bank bought bonds for $ 5.5 billion, although it had previously stated that it was ready to buy securities for 40 billion pounds.

Last Friday, a stronger-than-expected labor market report was published in the United States. As a result, the September figures from the US Department of Labor increased investors' concern that the Fed will continue to increase the interest rate in an attempt to cope with record inflation.

On Monday, world media reported that Russian President Vladimir Putin plans to meet with representatives of the Security Council after the attack on a major bridge between Russia and Crimea.

Following the results of Monday's trading, the stock exchanges of the Asia-Pacific region collapsed sharply. At the same time, trading volumes were insignificant due to the holidays in Japan and South Korea. Thus, the Shanghai Shenzhen CSI 300 stock indicator sank by 2.21%, and the Shanghai Composite lost 1.66%.

The main factor of pressure on the Asia-Pacific exchanges on Monday was the securities of chip manufacturers. Thus, the quotes of Anji Microelectronics Tech and Chengdu Xuguang Electronics companies fell by 20% and 10%, respectively, after the White House introduced export control measures. Under the new rules, Chinese companies will no longer have access to some semiconductor materials produced on United States equipment.

Such a decisive step by the American authorities, experts suggest, could provoke a tangible deterioration in trade relations between the United States and China and have serious economic consequences if the PRC takes retaliatory measures.

Another factor of pressure on Asian stock markets was the release of fresh data that by the end of September, the country's services sector declined amid permanent disruptions related to the consequences of the coronavirus pandemic.

This week, European traders will be waiting for the publication of statistical data on consumer prices in the United States. According to preliminary forecasts of experts, by the end of September, annual inflation in America slowed to 8.1% from August's 8.3%.

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[IFX Gertrude]

Apocalypse today: the yen has collapsed again



On Wednesday morning, the Japanese currency was covered by a strong tsunami caused by the USD. Paired with the dollar, the yen crossed the red line at 145.90 and collapsed to a new 24-year low. The dollar has dispersed

Today's culminating event in the foreign exchange market should be the release of the minutes of the September FOMC meeting.

Recall that last month, as part of the current tightening cycle, the US central bank raised the interest rate by 75 bps for the third consecutive time and signaled the continuation of an aggressive course in order to curb inflation faster.

Now traders hope that the Federal Reserve's minutes will shed light on the central bank's future plans regarding rates. If the report turns out to be more hawkish, it will strengthen expectations for another increase in the indicator by 75 bps.

This development is an excellent driver for the yield of 10-year US government bonds. Ahead of the release of the FOMC minutes, the indicator soared to a 14-year high at 4.006%.

The jump in yields contributed to the dollar's growth in all directions. At the start of Wednesday, the DXY index rose by 0.16% and tested a 2-week high at 113.54.

At the same time, the greenback showed the best dynamics against the yen, which is absolutely logical. Among all the currencies of the Group of 10, the JPY is particularly sensitive to the growth of long-term US bond yields, since the same Japanese indicator is still near zero.

The growing monetary divergence of Japan and the United States has led to the fact that this year the yen has sunk against the dollar by more than 20%. And this morning, the yen set another anti-record.

The USD/JPY pair jumped by more than 0.3% and touched the level of 146.35. The last time the quote was traded at this level was in August 1998.



Is the intervention close?

Of course, the fact that dollar bulls crossed the red line again further increased the risk of repeated currency intervention by the Japanese authorities.

Recall that the Japanese government intervened in the market for the first time in 24 years three weeks ago, when the USD/JPY pair reached the level of 145.90.

Now, when the quote turned out to be much higher than this level, many traders are afraid of a repeat of the September scenario in the near future.

However, this time Japanese politicians will most likely not focus on any particular red line.

At this stage, the more important indicator will be the rate of change in the exchange rate. This was announced this morning by Japanese Finance Minister Shunichi Suzuki.

"If the yen falls rapidly, it will force the Japanese government to push the red button again," Commonwealth Bank of Australia strategist Joseph Capurso shared his opinion.

Meanwhile, many analysts warn that in the short term, the dollar's growth may accelerate significantly on all fronts, including against the yen.

Today's FOMC minutes is far from the only obvious driver for the dollar. The real rocket fuel for the USD may be tomorrow's release of statistics on inflation in the United States for September.

If the market sees that consumer price growth is still steady, it is likely to reignite a wave of speculation about an even sharper rate hike in America.

In this case, the dollar may demonstrate another parabolic growth. Then Japan will simply have no other choice but to re-intervene.

The yen is doomed anyway

According to Kapurso, the Japanese government will intervene in the market by the end of this week. However, as in September, the effect of the intervention will be short-lived.

Any fluctuations caused by the intervention of the USD/JPY pair will stop within a few weeks, the analyst is certain.

The quote will be able to recover fairly quickly, since the dollar now has very strong support: the Fed's November meeting is ahead, which means the next round of rate hikes.

The asset has excellent growth potential in the longer term. Even if in the future the Fed starts to slow down the pace of tightening its monetary rate a bit, the Bank of Japan policy will still remain ultra-soft. This should support the US currency.

We expect that the dollar will remain strong at least until next spring, and we maintain our 3-month forecast for the USD/JPY pair at 147.00, Rabobank analysts said.

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[IFX Gertrude]

US stocks closed lower, Dow Jones down 0.10%



At the close of the New York Stock Exchange, the Dow Jones was down 0.10%, the S&P 500 was down 0.33% and the NASDAQ Composite was down 0.09%.

The leading performer among the components of the Dow Jones index today was JPMorgan Chase & Co, which gained 1.65 points (1.62%) to close at 103.61. Quotes of Coca-Cola Co rose by 0.66 points (1.21%), closing trading at 55.14. Intel Corporation rose 0.29 points or 1.16% to close at 25.33.

The biggest losers were Walgreens Boots Alliance Inc, which shed 0.67 points or 2.05% to end the session at 31.94. Walmart Inc was up 1.13% or 1.50 points to close at 131.17, while Boeing Co was down 0.87% or 1.15 points to close at 130.42..

Leading gainers among the S&P 500 index components in today's trading were Royal Caribbean Cruises Ltd, which rose 11.48% to 45.36, Norwegian Cruise Line Holdings Ltd, which gained 11.61% to close at 12. 98, as well as shares of Carnival Corporation, which rose 9.79% to close the session at 7.29.

The biggest losers were Albemarle Corp, which shed 7.89% to close at 251.45. Shares of T. Rowe Price Group Inc lost 5.14% to end the session at 98.07. Quotes of Entergy Corporation decreased in price by 4.52% to 96.58.

Leading gainers among the components of the NASDAQ Composite in today's trading were Pintec Technology Holdings Ltd, which rose 191.16% to hit 0.91, Agrify Corp, which gained 88.02% to close at 0.95, and also shares of 9F Inc, which rose 83.42% to close the session at 0.35.

The biggest losers were Fednat Holding Co, which shed 33.87% to close at 0.22. Shares of T2 Biosystms Inc lost 30.00% and ended the session at 0.06. Kinnate Biopharma Inc lost 26.65% to 8.12.

On the New York Stock Exchange, the number of securities that fell in price (1818) exceeded the number of those that closed in positive territory (1274), while quotes of 132 shares remained virtually unchanged. On the NASDAQ stock exchange, 1,902 stocks fell, 1,820 rose, and 278 remained at the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 0.18% to 33.57.

Gold futures for December delivery shed 0.33%, or 5.50, to hit $1.00 a troy ounce. In other commodities, WTI crude for November delivery fell 2.70%, or 2.41, to $86.94 a barrel. Futures for Brent crude for December delivery fell 2.13%, or 2.01, to $92.28 a barrel.

Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.03% to 0.97, while USD/JPY edged up 0.70% to hit 146.88.

Futures on the USD index rose 0.06% to 113.19.

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