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Daily summary: Global stocks mixed ahead of key inflation data

18:15 12 October 2022

 

  • European indices finished today's session slightly lower with the German DAX falling 0.39% as poor performance of the banking sector more than offset gains in consumer stocks.  

  • Credit Suisse shares plunged over 4% on reports that the US Justice Department is investigating whether the lender continued helping US clients hide assets from authorities. 

  • Bond yields edged higher as investors digested some confusing news about BoE's plans to end the bond-purchasing programme on Friday. Earlier headlines suggested that the central bank could extend bond purchases. However, the central bank confirmed that gilt purchases would end on Friday.

  • ECB's Holzmann said that all indicators point to stagnation or a slight recession. However, a shallow recession will not prevent the ECB from raising interest rates.

  • US indices erased early losses and are trading slightly higher as investors digested fresh producer price data that showed a bigger-than-expected rise last month, sparking additional concerns that interest rates will need to continue to rise fast. 

  • FOMC Minutes failed to trigger any major moves on the market. Records showed that policymakers judged that the Fed needed to move to, and then maintain, a more restrictive policy stance in order to provide price stability.

  • Tomorrow markets attention will focus on US CPI figures as traders will look for additional clues regarding the central bank rate path.  

  • Fed Kashkari said that the central bank will raise rates to possibly 4.5% and then remain there for some time as it assesses the economy. In his opinion Fed moving in 75 basis point increments is very aggressive.

  • Pepsi launched a new earnings season with upbeat quarterly results, while Cameco stock plunged 15.0% after the company announced plans to  acquire nuclear power equipment maker Westinghouse Electric in a deal worth $ 7.88 billion, including debt. 

  • Oil price fell around 2.0% as investors digested news from Poland where pipeline operator Pern found a leak in the Druzhba oil pipeline that connects Russia and Germany. Moods worsened later in the session after OPEC revealed in its October report that oil demand will increase by 2.64 million barrels per day, or 2.7%, in 2022, down 460,000 bpd from the previous forecast. That was the fourth time that the group cut the oil demand forecast. The cartel also lowered its 2023 forecast by 360,000 bpd to 102.02 million bpd.  Meanwhile EIA lowered its forecast for 2023 global oil demand growth by 490,000 bpd, to 1.48 million bpd year on year.

  • White House is considering a ban on Russian aluminium in response to Kremlin military escalation in Ukraine. As a result, the price jumped over 5.0%.

  • China is set to import Brazilian corn in challenge to US providers.

  • Precious metals continue to move south amid a stronger dollar. Gold pulled back to local support at $1670, while silver broke below $19.00 level. 

  • USD strengthened after PPI release and dollar index returned above 113 mark. GBPUSD rose 0.90% as traders digested BoE comments regarding its temporary gilt purchases programme. Currently NZD and GBP are the best performing major currencies while JPY and EUR lag the most.

  • Upbeat moods prevail on the cryptocurrency market. Bitcoin manages to defend support at $19000, while Ethereum tested $1300 level.

SILVER price has been under pressure in recent days. Looking at the D1 interval, today's candlestick is likely to close below the 19.20 level which is marked with the lower limit of the local 1:1 structure. According to the Overbalance methodology, a break below this level would herald a potential continuation of the downtrend and a possible test of the support zone around $18.30. Source: xStation5

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