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Risk currencies dominated their safe haven counter parts this week, but bitcoin bulls were the big winners as traders priced the possibility of an ETF approval right around the corner.

Notable News & Economic Updates:

Iron ore’s 50% surge is latest spike to fuel inflation fears

BOE officials double down on signals of imminent rate hike

Coinbase is launching a marketplace for NFTs

IMF warns on inflation, says the Fed and others should be prepared to tighten policy

G20 finance chiefs back tax deal, pledge to sustain recovery, watch inflation

U.S. 2021 crude output seen falling more than previously forecast – EIA

Chinese property firms suffer fresh downgrades amid Evergrande crisis

Fed says it could begin ‘gradual tapering process’ by mid-November

Turkish lira hits record low after Erdogan sacks central bank officials

IMF panel urges central banks to closely monitor inflation, ‘act appropriately’

Oil prices scale $85/bbl on back of supply deficit

China central bank says Evergrande debt woes are manageable

Dow jumps 380 points Friday, posts winning week after strong start to earnings season

The first bitcoin futures ETF in the U.S. is set to begin trading next week

Second J&J COVID shot gets expert backing; FDA looking at lowering age for Pfizer booster

Intermarket Weekly Recap

Dollar, Gold, S&P 500, Oil, T-Bond Futures, Bitcoin Overlay 1-Hour
Dollar, Gold, S&P 500, Oil, T-Bond Futures, Bitcoin Overlay 1-Hour

We saw choppy and mixed price action to start the week as traders set aside recent Chinese debt crisis and pandemic concerns, eagerly anticipating fresh inflation data and more clues on potential policy moves from central bank officials this week. So the broad market action didn’t really kick off until Wednesday, where we got another stronger-than-forecast inflation read from the U.S. and commentary from the Federal Reserve meeting minutes that a taper was  likely coming before the end of the year.

Now, rising inflation and monetary policy tightening headlines have normally drawn in  broad risk aversion behavior, but it looks like the different major asset classes were marching to their own beat after Wednesday’s top tier events. Gold popped higher (likely on the strong inflation data and dip in Treasury bond yields/U.S. dollar), equities started their move higher (possibly more influenced by strong earnings reports), while oil began it’s second move higher (likely on IEA’s bullish oil demand growth forecast and Saudi Arabia dismissing of calls for additional supplies).

Crypto was in its own world as well, lead higher mainly by week-long speculation of an imminent bitcoin futures ETF approval in the U.S.  There’s no official approval yet announced from the SEC, but ProShares updated their prospectus for a Monday launch, indicating that they may have already gotten the green light from the SEC.  We’ll just have to wait-and-see what Monday brings, but whatever the case may be, this development was enough to send bitcoin ripping higher to break the $60K handle before the weekend.

As for the forex space, the major pairs essentially traded as-if it was a pure risk-on kinda week. The comdolls dominated the safe havens, with the Kiwi & Aussie leading the way higher despite the lack of any major bullish catalysts from New Zealand and Australia.

The British pound was a strong relative performer as well, likely finding support on rising speculation that the Bank of England is ready to hike rate soon. And as usual for this type of environment, the Japanese yen and U.S. dollar were the biggest losers of the week.

It’s possible that forex traders elected to focus on improving pandemic conditions for their bullish lean, as we saw positive headlines in terms of coming booster shot and therapy approvals, rising vaccine rates, and  declining death rates across the globe. It’s also arguable that the PBOC’s calming comments on the Evergande Group’s debt crisis may have been contributors to traders’ move away from safe havens as well.

USD Pairs

Overlay of USD Pairs: 1-Hour Forex Chart
Overlay of USD Pairs: 1-Hour Forex Chart

A record 4.3 million workers quit their jobs in August, led by food and retail industries

Fed policymakers hone in on November taper timeline

Fed’s Bostic says elevated inflation not affecting interest rates stance

Fed’s Bullard says bond purchases should be tapered quickly in case rate hikes are needed

Consumer prices rise more than expected as energy costs surge

Fed split on whether to stay patient or get aggressive on inflation

Higher prices help to boost U.S. retail sales in September

Food, fuels lift U.S. import prices in September

GBP Pairs

Overlay of GBP Pairs: 1-Hour Forex Chart
Overlay of GBP Pairs: 1-Hour Forex Chart

BOE’s Saunders seen pushing for bigger-than-expected rate hike

U.K. retail sales recovery slows further in September as consumer confidence wanes

UK job vacancies reach 20-year high

U.K. payrolls rise above pre-covid levels with record hiring

Bank of England ends closed-door policymaker briefings with banks

UK house prices could surge as fewer properties come on market

Wait and see before hiking interest rates, Bank of England rate-setters say

EUR Pairs

Overlay of EUR Pairs: 1-Hour Forex Chart
Overlay of EUR Pairs: 1-Hour Forex Chart

Italian industrial production down 0.2% vs. projected 0.4% drop

ECB’s Knot warns investors of risks of higher inflation

Bottlenecks drag German sentiment down for fifth month running – ZEW

French final CPI down another 0.2% as expected

ECB’s Centeno says inflation rise still seen as temporary

Wunsch open to ECB flexibility but wary of changing tools often

CHF Pairs

Overlay of CHF Pairs: 1-Hour Forex Chart
Overlay of CHF Pairs: 1-Hour Forex Chart

Swiss Producer and import price index: +0.2% to 104.1 in September 2021

CAD Pairs

Overlay of CAD Pairs: 1-Hour Forex Chart
Overlay of CAD Pairs: 1-Hour Forex Chart

Statistics Canada says manufacturing sales rose 0.5% in August

Canadian sales in the wholesale trade sector rose 0.3% in August to $70.3 billion

NZD Pairs

Overlay of NZD Pairs: 1-Hour Forex Chart
Overlay of NZD Pairs: 1-Hour Forex Chart

New Zealand’s card spending edges up as COVID-19 alert level changes

New Zealand ANZ business confidence index down from -7.2 to -8.6

AUD Pairs

Overlay of AUD Pairs: 1-Hour Forex Chart
Overlay of AUD Pairs: 1-Hour Forex Chart

Australia’s rising business confidence ‘reflects hope rather than reality’

RBA deems climate change “first order risk” to economy

Australia’s unemployment rate rose to 4.6% in September – and the labour market might not recover before 2022

JPY Pairs

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart

Japan producer price index at 13-year high

Japan premier warns of negative impact on companies from weak yen

Japan’s turn? Power prices hit 9-month highs amid global energy crunch