The USD moved lower today, helped by risk-on flows in some of the beaten down currencies. The GBP and the AUD are the strongest of the majors. The EUR and the NZD were also on the margin higher today. The GBP moved higher with the help of dismantling of the fiscal measures by the newest Chancelor of the Exchequer Jeremy Hunt. If the prior measures sent yields sharply higher and the currency sharply lower, why not reverse the measures, and that is what he did. Who would have known it would be so easy? ; )

The UK 10 year yield tumbled 40 bps today.

hunt
Chancellor of the Exchequer Hunt

The losers in the forex were the JPY and the USD. The USDJPY is moving above 149.00 into the close and trades to yet another high going back to 1990. The BOJ is still doing their yield curve control stuff. The other central banks are still fighting inflation (although the end of the road may be coming).

The GBPJPY moved the most on the day with a gain of 1.83% higher. The AUDJPY and the NZDJPY moved up 1.7% and 1.44% respectively.

Recall, the September BOJ intervention level from was at 145.90. The USDJPY has been grinding higher and has now put some distance between the current price above 149.00 and that level. The USDJPY will close up for the 9th consecutive day which has taken the price from 143.51 to 149.08. That is 458 pips. The BOJ does not want to see one-way price action. The price action has been one-way over the last 9 days.

The closest victory for sellers of the USDJPY would now be a move below the 100/200 bar MAs on the 5 minute chart at 148.80 and 148.76. Below that is the low for the day at 148.40. Move below those levels, and stay below, is now needed to give the sellers the smallest of victories in the new trading day (see post here).

NOTE: If there is intervention, there is room to roam. I would not sell, however, until those MAs are broken, and then would want to see the price stay below those levels at all costs (that is for the short to remain in place).

forex
The strongest to the weakest of the major currencies.

The only piece of economic news today was the Empire manufacturing index which came in weaker at -9.10 vs -4.0 estimate. There was little in the way of Fedspeak today. Be aware that the last chance for chatter will be this coming Friday before the muzzles are put on the Fed officials until the rate decision on November 4, 2022.

The expectations are for 75 basis points. Despite the concerns that the Fed will over tighten, they seem intent on going to 4.25% to 4.5% as the target fed funds range by year end (with some Fed officials though throwing out cautionary words that they don't want to do too much).

The US stocks liked the risk on story today:

  • Dow industrial average surge by 550.99 points or 1.86% to 30185.83
  • S&P index rose 94.86 points or 2.65% to 3677.94
  • NASDAQ index rose 354.42 points or 3.43% to 10675.81
  • Russell 2000 rose 53.35 points or 3.17% to 1735.75.

IN the US debt market:

  • 2 year yield 4.452%, -4.6 basis points
  • 5 year yield 4.236%, -3.3 basis points
  • 10 year yield 4.015%, -1.0 basis point
  • 30 year yield 4.023%, +2.5 basis points

in the other markets:

  • spot gold is trading up $6.86 or 0.42% at $1650.51
  • spot silver is up $0.41 or 2.26% at $18.64
  • WTI crude oil is at $85.58 near unchanged on the day
  • Bitcoin is trading at $19,537