Stocks rallied (NASDAQ +2.25%) for a third consecutive day and weighing on yields but US10yr still holds over 4.0%. Rishi Sunak confirmed as new UK PM, lifting GBP, Gilts & UK100. MSFT & Alphabet both missed Earnings after hours. Asian markets hit 2.5 year lows again but remain positive. (Nikkei +0.80% Hang Seng 0.86%), European FUTS also higher. AUD CPI hit a 32-yr high at 7.3%.
EUR – leaped over 100 pips from 0.9850, lows yesterday to 0.9978 now ahead of an expected 75 bp rate hike from the ECB on Thursday. JPY – Cooled from yesterday’s pivot at 148.85, through 148.00 to 147.85 now, again ahead of the BOJ rate announcement later this week. GBP – Sterling rallied strongly (over 230 pips) yesterday to test the key 1.1500 psychological level as Sunak became PM and ruthlessly implemented his own cabinet. Stocks – Wall Street rallied again yesterday (+1.07-2.25%) SNAP a further +15.52% after Fridays drumming, TSLA +5.29% & TWTR +2.45%, (Musk said the deal to be done by Friday). MSFT & GOOGL both -6.75% after hours. US500 closed at 3859, FUTS trades at 3830 now. USOil – from $83.00 lows again yesterday to test $85.50 after inventories showed draw downs, back to $84.70 now. Gold – dipped to $1640, yesterday before breaching $1660 to test $1665 resistance. BTC – rallied from $19.2k support to breach the important $20k to trade at $20.1k now.
Today – EZ M3, US New Home Sales, BOC Announcement. EARNINGS – Meta, Boeing, BASF, Deutsche Bank (beat), Mercedes-Benz (profits significantly higher), Standard Chartered (beat) Barclays, and more.
Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.56%) Rallied from 0.6300 yesterday to 0.6435 now following surprise rise in AUD CPI, next resistance 0.6450. MAs aligned higher, MACD histogram & signal line positive & rising, RSI 72.82, OB but still rising, H1 ATR 0.00165, Daily ATR 0.01100.
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Stuart Cowell
Head Market Analyst
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