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Steady shock after inflation – Action Forex | Omd Cialis

Stock markets are a little mixed on Thursday after a roller coaster week leading up to and following the US inflation report.

It’s safe to say that investors have rushed in a desperate bid to get on the peak inflation train early. Tuesday’s collapse – which continued across Asia and Europe through Wednesday – looked pretty severe at first glance, but it was simply a liquidation of positions based on expectations of a string of good numbers in the days leading up.

While the Fed is now almost certain to hike 75 basis points next week and more than previously expected in subsequent months, the view still seems to be that Tuesday was more of a setback than a turning point. Confidence that we are at or near the inflation peak is battered but not broken and this week serves as a reminder that the road back to 2% is likely to be littered with nasty surprises, as is the case on the way up was the case.

The RBA is likely to welcome the jobs report

This will likely be the case for most central banks, not just the Fed, as the RBA appears to be in the early stages of its pivot to slower tightening. After raising rates by 50 basis points, markets are now pricing in a 25 basis point hike next month, although as we’ve seen so many times this year, that could change quickly with the data. Today’s jobs data could support such a move as employment rose slightly less-than-expected, while labor force participation also rose, taking the unemployment rate unexpectedly higher to 3.5%. The Australian dollar rose following the release but has since given back most of it.

PBOC leaves MLF unchanged and supports CNY

The PBOC’s fight for yuan support continued on Thursday as it kept the 1-year MLF rate unchanged at 2.75% and fixed the currency more tightly. The result was that around 200 billion yuan was withdrawn from the banking system, with the central bank declaring that it would “keep the banking system’s liquidity reasonably sufficient.” The twin threats of a slowing economy and a falling currency against the dollar pose quite a challenge for the central bank, which continues to try to roll back both with limited success.

Yen steady amid intervention warnings

The yen remains a key focus after a series of interventionist comments yesterday that accompanied reports of BoJ interest rate control. While officials have been keen to state that there will be no warning of intervention, or perhaps even confirmation of it, the line in the sand appears to have been drawn around 145 against the dollar. The message was loud and clear and now the only question is whether the markets will respect it. That’s not always the case and we’ve seen his resolve tested after 24 years without such action.

Oil level according to inventory data

Oil prices have stabilized somewhat after staging a strong recovery over the past week. There are many forces currently dictating price action in oil markets, with economic uncertainty right alongside a potentially unpredictable OPEC+. The stronger dollar may be another headwind as the rally lost momentum earlier this week as the greenback rallied following the inflation release.

Wednesday’s inventory data didn’t cause much jiggling, although it beat forecasts with a build of 2.442 million barrels, while expecting something far more modest. Of course, this was still much smaller than what the API count indicated a day earlier, which perhaps limited the surprise factor.

Did the damage occur?

Gold still hurts after Tuesday’s inflation data. It was just beginning to reorient itself ahead of the dates and the report dealt a devastating blow. The yellow metal is down about four-tenths of a percent this morning and is comfortably below $1,700. However, the key level is $1,680 and a clear break could be painful as it has been a bottom for the past several years. We could then see some support around $1,660 but at that point the damage will be done.

Will it be a sell the fact event?

Bitcoin has stabilized back around $20,000 after Tuesday’s painful encounter with US inflation data. As we’ve seen elsewhere, the cryptocurrency had rallied in anticipation of something cheaper, but it wasn’t to be. Now that that’s behind us, how will the crypto space react to the Ethereum merger? It has been a long time coming and the question on traders’ lips right now is whether it will be the next bullish catalyst for crypto or a sell the fact event.

Updated: September 17, 2022 — 1:32 am

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