[av_revolutionslider id=’32’ av_uid=’av-a1kbp3p’]
17 October 2022
- This is the second time in a few weeks that the Bank of England has had to intervene in the bond market, but this week its intervention was rather unusual. On Tuesday, the central bank announced the purchase of inflation-linked debt, but warned that this assistance would only last until the end of the week.
- Bank of England boss Andrew Bailey warned pension funds that have been struggling to meet margin calls to act quickly, as they have just three days to put things right. But if the liability-driven investment managers, which help pension funds hedge, can’t shore up cash by Friday, another U-turn could be coming.
- Analysts and investors are now making fun of Bailey, saying that if the BoE has to intervene again, he’ll look like a total fool. The BoE’s credibility is now badly tarnished and it will probably be a long time before the markets trust it again. But it may already be too late for sterling and pension funds.
Indices
US stocks have had a wild week with mixed results. Significant volatility came towards the end of the week, with inflation data influencing market action. On Thursday, the S&P 500 index posted its biggest daily move (5.52%) since March 2020, first falling to its lowest level in over a year and eventually ending the day with a gain of over 2%. Stocks in Europe also had a volatile week and ended the week mixed. Germany’s DAX advanced 1.34%, France’s CAC 40 gained 1.11%, and the UK’s FTSE 100 Index lost 1.89%.
 |
US30 +1.18% |
|
US100 -3.11% |
|
US500 -1.48% |
 |
GER40 +1.34% |
Commodities
After two weeks of growth, the price of crude oil fell by more than 7%, writing off about half of the aforementioned two-week growth. Thus, the main risk factor remains the poor economic outlook and rising numbers of new Covid infections in China.
Precious metals, and gold in particular, are being adversely affected by an increasingly strong dollar, which is replacing gold in its safe-haven status. The price of the yellow metal has reached the key support level of USD 1,650 and the coming days will show if it can be sustained.
 |
Gold -3.19% |
 |
Silver -10.47% |
 |
BRENT -5.51% |
 |
NATGAS -3.91% |
Forex
G7 leaders said in a joint statement on Wednesday that they would monitor developments in the currency market in the context of the recent rise in volatility, which they said was unhealthy and damaging to markets and economies. Japan’s top currency diplomat Masato Kanda then added on Friday that Japan is “ready to take decisive action any time, if excessive moves in the yen continue”. However, the dollar hit a new 32-year high against the yen on Friday.
 |
EUR/USD -0.17% |
 |
USD/JPY +2.33% |
 |
GBP/USD +0.77% |
 |
USD/CAD +1.05% |
Macro
In the US, we first learned on Wednesday that producer prices rose 0.4% in September, double consensus expectations for around a 0.2% increase. Core (less food and energy) prices rose 0.3% in September, coming in roughly in line with expectations.
However, consumer prices ultimately had a much bigger impact on market action, and while their growth slowed in September, it was not enough. After August’s 8.3% year-over-year decline was expected to fall to 8.1%, but prices rose 8.2% year-over-year Core consumer prices rose 6.6% on a year-over-year basis in September, more than expected.
The UK economy unexpectedly fell 0.3% in August due to a fall in industrial output. Meanwhile, the labor market tightened further. The unemployment rate fell to 3.5% in the three months through August, the lowest level since 1974.
What to watch out for this week
- This week in the US we focus mainly on the housing market, with reports due on building permits, housing starts and existing home sales. Rising mortgage rates led to the first decline in home prices in July.
-
Regional Fed presidents Neel Kashkari, Charles Evans and James Bullard are also due to make appearances.
-
In Europe, investors will focus on inflation in the Eurozone, and particularly in the UK, where prices are expected to rise by double digits amid a cost-of-living squeeze. In addition, the ZEW economic sentiment indexes for Germany and the entire Euro Area will be released on Tuesday.
Day:
Impact:
Restrictions:
Description
Instrument
Dates
GMT +2
Forecast
Previous
Add event to calendar
Error: Your Requested widget "FTMO Start Challenge " is not in the widget list.
- [do_widget_area av_blog]
- [do_widget_area av_everywhere]
- [do_widget id="categories-6"]
- [do_widget id="categories-4"]
- [do_widget id="categories-7"]
- [do_widget id="newsbox-3"]
- [do_widget id="recent-posts-4"]
- [do_widget_area av_footer_1]
- [do_widget id="text-8"]
- [do_widget id="text-13"]
- [do_widget id="text-14"]
- [do_widget id="text-12"]
- [do_widget id="text-16"]
- [do_widget id="text-18"]
- [do_widget id="text-20"]
- [do_widget id="text-23"]
- [do_widget_area av_footer_2]
- [do_widget id="nav_menu-19"]
- [do_widget id="nav_menu-26"]
- [do_widget id="nav_menu-20"]
- [do_widget id="nav_menu-21"]
- [do_widget id="nav_menu-22"]
- [do_widget id="nav_menu-23"]
- [do_widget id="nav_menu-24"]
- [do_widget id="nav_menu-25"]
- [do_widget_area av_footer_3]
- [do_widget id="nav_menu-4"]
- [do_widget id="nav_menu-27"]
- [do_widget id="nav_menu-10"]
- [do_widget id="nav_menu-11"]
- [do_widget id="nav_menu-9"]
- [do_widget id="nav_menu-13"]
- [do_widget id="nav_menu-15"]
- [do_widget id="nav_menu-17"]
- [do_widget_area av_footer_4]
- [do_widget id="nav_menu-5"]
- [do_widget id="nav_menu-28"]
- [do_widget id="nav_menu-8"]
- [do_widget id="nav_menu-7"]
- [do_widget id="nav_menu-6"]
- [do_widget id="nav_menu-14"]
- [do_widget id="nav_menu-16"]
- [do_widget id="nav_menu-18"]
- [do_widget_area av_pages]
- [do_widget_area eckb_articles_sidebar]
- [do_widget_area eckb_articles_sidebar_2]
- [do_widget_area eckb_articles_sidebar_3]
- [do_widget_area footer-ftmo-left]
- [do_widget id="text-10"]
- [do_widget id="text-11"]
- [do_widget id="text-9"]
- [do_widget id="text-15"]
- [do_widget id="text-17"]
- [do_widget id="text-19"]
- [do_widget id="text-21"]
- [do_widget id="text-24"]
- [do_widget_area footer-ftmo-right]
- [do_widget_area post-loop-footer-author]
- [do_widget id="text-2"]
- [do_widget id="text-4"]
- [do_widget id="text-3"]
- [do_widget id="text-5"]
- [do_widget id="text-6"]
- [do_widget id="text-7"]
- [do_widget id="text-22"]
- [do_widget id="text-25"]
- [do_widget_area tet]
- [do_widget id="nav_menu-2"]
- [do_widget_area widgets_for_shortcodes]
- [do_widget_area wp_inactive_widgets]
- [do_widget id="custom_html-18"]
- [do_widget id="recent-comments-2"]
Disclaimer
All information provided on this site is intended solely for the study purposes related to trading on financial markets and does not serve in any way as a specific investment recommendation, business recommendation, investment opportunity, analysis or similar general recommendation regarding the trading of investment instruments. The content, in its entirety or parts, is the sole opinion of FTMO and is intended for educational purposes only. The historical results and/or track record does not imply that the same progress is replicable and does not guarantee profits or future profitable trading records or any promises whatsoever. Trading in financial markets is a high-risk activity and it is advised not to risk more than one can afford to lose!
