DAILY ANALYSIS 18 october 2022

• Wall Street rallied yesterday with all major US indices posting big gains. S&P 500 added 2.65%, Dow Jones gained 1.86% while Nasdaq rallied 3.43%. Russell 2000 jumped 3.17%
• Indices from Asia-Pacific followed into US peers’ footsteps and also posted big gains today. Nikkei jumped 1.5%, S&P/ASX 200 moved 1.7% higher while Kospi traded 1.2% up. Indices from China traded up to 1.3% higher
• DAX futures point to a higher opening of the European cash session today
• Bloomberg reports that White House may make another SPR announcement this week
• According to Financial Times report, Bank of England may delay start of QT further to make sure that stability on gilt market has been restored
• New Zealand inflation data accelerated from 1.7% to 2.2% QoQ in Q3 2022 (exp. 1.6% QoQ) Higher than expected reading boosted NZD as bets on 75 bp RBNZ rate increase during November meeting increased
• USDJPY jumped above 149.00 overnight, triggering a verbal intervention from Japanese officials. Finance minister Suzuki said that country will not tolerate excessive FX moves driven by speculators. BoJ Governor Kuroda said that the Bank is closely monitoring developments on FX market
• AUD ticked higher after RBA minutes for October noted that rates are not especially high
• RBA Deputy Governor Bullock said she still believes there is a path to lowering inflation without causing a recession
• Release of Chinese GDP data for Q3 2022 and monthly activity data for September, which was initially scheduled for today, was postponed until after Communist Party National Congress
• Cryptocurrencies are trading mostly higher but scale of moves is relatively small. Bitcoin and Ethereum gain 0.3% while Ripple trades 0.1% higher
• Commodities benefit from USD weakness – oil trades 0.6% higher while gold gains 0.5%
• AUD and NZD are the best performing major currencies while USD and JPY lag the most

USDJPY jumped above 149.00 mark today, triggering verbal interventions from finance minister Suzuki and BoJ Governor Kuroda. The pair has pulled back in response but remains at elevated levels. Verbal interventions in Japan are now being made on almost a daily basis.