October 1st Morning Update

The US$ is lower, oil is lower, equity markets are lower while US yields are lower. Biden signs funding bill, avoiding shutdown. Infighting within the Democratic Party prompted a delay on the infrastructure plan vote. Dollar set for best week since June on expected Fed tightening. In other news, Oil slips below $78 as OPEC+ weighs further output hike. EU and Australia Trade talks postponed after Australia cancelled submarine deal with France and signed a deal benefiting the US and UK. COVID, Merck seeking emergency authorization for oral Covid treatment after ‘compelling results’ in trials. Molnupiravir, reduced the risk of hospitalization or death by around 50% for patients with mild or moderate cases. Australia to ease international border restrictions from November. South Korea extends social distancing policies as case rises in Seoul. LA officials signaled they would vote to prohibit unvaccinated from entering most businesses. Singapore reports highest single day rise in cases. In currency markets, U.S. Trade Representative Katherine Tai will unveil the Biden administration’s long-awaited strategy for the troubled U.S.-China trade relationship.

The C$ under pressure as oil retreats off a 3-year high. Reports that OPEC is considering release more oil to the markets to counter the ongoing supply crunch. Markets now awaits Canadian GDP and US Core personal consumption and ISM manufacturing PMI. Support moves to 1.2660, while resistance now at 1.2770.

Euro zone inflation jumps to 13-year high, worsening ECB headache. The Euro found a base around 1.1570. Market unphased with Eurozone higher than expected Preliminary CPI. Awaiting US figures later this morning. Support resets to 1.1570, while resistance holds at 1.1675.

EURGBP moved sharply lower after testing the .8650 level.

Support moves to .8580 (1.1655) while resistance resets to .8660 (1.1547). GBP/USD staged a small comeback in early trading after a 300-bps