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The British pound easily took the top spot this week as the uncertainty with the U.K.’s political and financial scene eased.

In the broad markets, risk-on sentiment was back in play as this week’s data likely had traders thinking that an end the aggressive central bank tightening regime may not be too far off.

Notable News & Economic Updates:

China’s exports grew by 5.7% y/y to $322.8B in September; it’s the slowest rate of growth since April. Imports inched up by 0.3% y/y vs. 1.0% y/y forecast

China GDP for Q3 was 3.9% y/y vs. 3.3% y/y forecast; the unemployment rate increased to 5.5% vs. 5.3% previous

CFTC Chair Rostin Behnam said on Monday that  he sees ether as a commodity — not a security.

Oil prices jumped on Wednesday on record high U.S. crude exports and strong refining demand; WTI crude broke back above $88/bbl while Brent crude jumped above $96/bbl

The Kremlin reported on Wednesday that Russia tested ballistic and cruise missiles, launching from the Artic to the Russia’s Far East region

The Bank of Canada surprised markets with a smaller-than-expected rate hike of 50 bps vs. a 75 bps forecast

Russian President Putin said on Thursday that his nation has never discussed a nuclear strike, and that there was no necessity for Russia to attack Ukraine with nukes.

As expected, the European Central Bank raised the deposit rate to 2.00% vs. 1.25% previous

The International Monetary Fund lowered its economic projections for Asia to 4.0% for 2022 (vs. a 4.9% forecast back in April) on Friday.

North Korea fired two short-range ballistic missiles on Friday from the North’s eastern coastal Tongchon area

The U.S. Core PCE Price Index annualized read of 5.1% y/y came in slightly below expectations, taming inflation fears a bit during the Friday session.

Intermarket Weekly Recap

Dollar, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay 1-Hour

Dollar, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay 1-Hour

It was an action packed week in terms of calendar events and headlines, starting with a economic data dump from China on Monday. It looks like this round was arguably net negative to the global growth picture, and likely why oil, bond yields and equities to a dip to start the week.

But the real price action didn’t kick in until Tuesday where we saw equities, oil and crypto bounce, but with no apparent direct catalyst.

It was likely a reaction to a combination of data releases, including net weak flash global PMIs, weak data from China and the U.S. , that had traders starting to think a pivot in central bank tightening sentiment may soon take place.

This thesis was actually supported on Wednesday after the Bank of Canada decided to hike by only 50 basis points (vs. a forecast of 75 basis points), and on Thursday by the European Central bank who hiked by 75 bps but didn’t give a strong indication of further hikes ahead (instead said they’ll decide meeting by meeting).

Thursday price action was relatively subdued but leaned slightly risk-off (likely a reaction to weak tech company earnings/outlook from the U.S.), but on Friday the volatility picked up once again after the latest read from the Fed’s preferred inflation metric, the core PCE price index, came in mostly inline with expectations.

With no upside surprise in inflation (and even a slight tick down in the annualized read), the markets took this as further support that the Fed may slow down their aggressive monetary policy rhetoric at upcoming meetings, evidenced by a pop higher in equities and crypto and tick lower in bond yields around the event release.

USD Pairs

Overlay of USD Pairs: 1-Hour Forex Chart

Overlay of USD Pairs: 1-Hour Forex Chart

U.S. Flash Manufacturing PMI for October: 49.9 vs. 52.0 in September; Services Index at 46.6 vs. 49.3; input cost pressures have increased; employment conditions mostly unchanged

U.S. Home Prices growth in August: +13.1% y/y vs. 16.0% y/y in July according to the S&P CoreLogic Case-Shiller Home Price Index

U.S. New home sales fell -10.9% y/y to 603K in September

U.S. GDP rebounded slightly in Q3 2022 with the advance read at +2.6% q/q vs. 2.3% q/q forecast

U.S. durable goods for September: +0.4% m/m vs. upwardly revised +0.2% m/m in August

U.S. weekly jobless claims: 217K vs. 214K previous

U.S. Core PCE Price Index came as expected at 0.5% in September, inline with the August read; the annualized read of 5.1% y/y was slightly below expectations

U.S. Personal income in September: +0.4% m/m vs. an upwardly revised August read of +0.4% m/m

U.S. UOM consumer sentiment for October: 59.9 vs. the preliminary read of 59.8, and above the September read of 58.6

GBP Pairs

Overlay of GBP Pairs: 1-Hour Forex Chart

Overlay of GBP Pairs: 1-Hour Forex Chart

On Monday, Rishi Sunak was elected as the new leader of the Conservative Party, making him the next prime minister of Britain.

U.K. Flash Manufacturing PMI for October: 45.8 vs. 48.4 previous; Services PMI at 47.5 vs. 50.0 previous; output and demand continue to weaken; political uncertainty added to inflationary pressures contributed to downbeat sentiment

U.K. bond prices rallied on Monday as traders bet that new Prime Minister Rishi Sunak will put an end to weeks of upheaval plaguing the nation’s markets and restore credibility to economic policy making

U.K. CBI manufacturing output for October -4%, the same as September, but sees output to increase over the next three months; firms seeing a shortage of skilled labor is at its highest level since 1973 at 49%; New orders fell -8% q/q vs. +11% q/q in July

The unveiling of a highly anticipated strategy for stabilizing the nation’s public finances was pushed back by Britain’s new Prime Minister Rishi Sunak on Wednesday to Nov. 17, two and a half weeks later than originally anticipated.

EUR Pairs

Overlay of EUR Pairs: 1-Hour Forex Chart

Overlay of EUR Pairs: 1-Hour Forex Chart

Germany Flash Manufacturing PMI for October: 45.7 vs. 47.8 previous; Services PMI at 44.9 vs. 45.0 previous

Eurozone Flash Manufacturing PMI for October: 46.6 vs. 48.4 in September; Services PMI at 48.2 vs. 48.8 previous; inflationary pressure remain due to high energy prices and rising wages

Germany Ifo business climate index in October ticked lower to 84.3 vs. a revised 84.4 read in September

Euro area M3 money supply growth for September: +6.3% y/y vs. 6.1% y/y in August; private loans increased by 5.5% y/y vs. 5.6% y/y in August

German GfK consumer climate index improved from -42.8 to -41.9 in Oct

Spanish jobless rate ticked higher from 12.5% to 12.7% in Q3 vs. 12.4% forecast

The European Central Bank raised the deposit rate from 0.75% to 1.50% as expected; future policy path will be decided during the upcoming meetings

Germany posted unexpected Q3 growth — up by 0.3% q/q vs. -0.2% q/q expected

France CPI for October; 7.1% y/y vs. 6.4% y/y forecast

CHF Pairs

Overlay of CHF Pairs: 1-Hour Forex Chart

Swiss KOF Economic Barometer fell from 92.27 in September to 90.93 in October

CAD Pairs

Overlay of CAD Pairs: 1-Hour Forex Chart

Overlay of CAD Pairs: 1-Hour Forex Chart

The Bank of Canada hike interest rates by 50 bps to 3.75% vs. an expectation of a 75 bps hike; the BOC sees growth slowing through the first half of 2023

Canada GDP for August: +0.1% m/m vs. 0.0% m/m forecast

NZD Pairs

Overlay of NZD Pairs: 1-Hour Forex Chart

Overlay of NZD Pairs: 1-Hour Forex Chart

RBNZ chief economist Paul Conway said on Tuesday that despite the fact that inflation in New Zealand was higher than anticipated in the third quarter, the central bank remains “hopeful” that it has peaked.

ANZ’s survey shows a 6 point drop in business confidence in October to -43; inflation pressures remain high with expectations at 6.13%

RBNZ Governor Adrian Orr warned on Thursday that the central banks efforts to slow inflation will likely slow down employment conditions in the near-term

New Zealand consumer confidence for October: unchanged at 85.4 vs. previous

AUD Pairs

Overlay of AUD Pairs: 1-Hour Forex Chart

Overlay of AUD Pairs: 1-Hour Forex Chart

Australia manufacturing PMI slows from 53.5 to 52.8 in October; Services PMI contracts from 50.6 to 49.0 in October

RBA Assitant Governor Christopher said on Monday that further rates are likely, but the timing and size wil depend on data

ANZ Roy Morgan weekly survey of consumer sentiment: 81.1 vs. 82.2 previous (-1.3% w/w)

Australia’s annual inflation races from 6.1% y/y to a 32-year high of 7.3% y/y in September; CPI jumped 1.8% m/m vs. 1.6% m/m forecast

RBA’s trimmed mean CPI jumped from 4.9% y/y to 6.1% y/y, much higher than RBA’s 2% – 3% target

Australian import prices up by 3.0% q/q in Q3 vs. a projected 0.8% q/q uptick

Australia producer price index read for September quarter rose 1.9% q/q (1.4% q/q previous) and 6.4% y/y

JPY Pairs

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart

Japan flash manufacturing PMI for October: 50.7 from 50.8 in September; Services PMI was higher at 53.0 vs. 52.2 in September, likely due to increasing travel volumes

Bank of Japan was suspected to have intervened again on Monday after the yen jumped against the dollar to 145.50 during the Asian session. Japan officials continued to refuse to make comments on any possible intervention actions.

BOJ core CPI read was up from 1.9% y/y in August to 2.0% y/y in September

Japan Services PPI for September: +2.1% y/y vs. 1.8% y/y forecast and 2.0% y/y previous

Tokyo Core Consumer price index hit a 33-year high of 3.4% y/y in October vs. 3.2% y/y forecast

Japan unemployment rate for September: 2.6% vs. 2.5% forecast and 2.5% previous

On Friday, the Bank of Japan held monetary policy as-is and pledged to keep interest rates ultra-low after their latest meeting; they see 2.9% inflation in FY2022