• USDIndex – tumbled to 112.43 after the BoE’s actions ( worst session in 2.5 years). Today it found some ground edging towards 113.35, buoyed by renewed pressure on the Pound.
• Yields: BoE’s announcement that it will buy up to GBP 5 bln a day for 13 days in a bid to stabilise markets bruised by the government’s mini-budget may have helped Gilts and wider bond markets to recover somewhat yesterday, but while Australia and New Zealand bonds rallied in catch up trade, yields are already rising again in Europe and the US. Record surge in Gilts where the 30-year rate plunged a historic 105 bps to 3.913%, unwinding the better than 130 bp selloff to a 5.135% high. The 10-year Gilt crashed 50 bps, the most since 1992, to 3.999%.

While intervention supported Gilts, Treasuries rallied on haven demand amid global investor jitters, bargain hunting, a solid 7-year auction, and a month-end bid. 

• GBP remains volatile as BoE presses panic button. Sterling rallied on the BoE’s initial announcement of bond purchases, but Cable has since settled at the 1.08 area as the rapid switch from scheduled asset sales to “temporary” bond purchases has not really helped to instill confidence in the currency. 
• EUR – returned to 0.9665.
• JPY traded at 144.70.
• Stocks:  The 1.96% bounce to 3718 in the US500 snapped a six-day string of losses, the worst since February 2020, as the index climbed off of Tuesday’s 3647, a new 2022 low. Strength was broadbased with energy climbing over 4%. The US100 jumped 2.05% to 11,051, and the US30 rose 1.88% to 29,683.
• USOil up to $81. Goldman Sachs cut its 2023 oil price forecast, citing expectations of weaker demand and a stronger USD. China’s travel during the upcoming week-long national holiday is set to hit the lowest level in years as Beijing’s persistent zero-COVID rules prompt people to stay at home and economic woes dampen spending. Citi economists have lowered their China GDP forecast from 5% year-on-year growth to 4.6% for the fourth quarter of 2022.
• Gold – after some buying retreated to $1647.
• BTC – at 19375.
• Today: German Inflation, ECB’s Panetta, de Guindos, Elderson and Lane speeches, US GDP and Jobless claims.

Biggest FX Mover @ (06:30 GMT) NZDUSD (-1.05%) back to 0.5655. Intraday fast MAs aligning lower, MACD histogram & signal line are turning to 0, RSI at 2342, H1 ATR 0.00173, Daily ATR 0.00953.

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Andria Pichidi

Market Analyst

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