October 4th Morning Update

The US$ is lower, oil is up, equity markets lower US yields are up. According to Bloomberg, FED’s Clarida sold up to $5m worth of bonds and bought stocks (February 27th, 2020) one day prior to Powell’s announcement of potential policy action due to the worsening of COVID-19. Clarida becomes the 3rd Fed official to involved in questionable trade in the last month. The previous 2 resigned. Evergrande will sell a half-stake in its property management unit to Hopson Development for more than $5 billion. In other news, Energy costs add to emerging central banks’ inflation headache. Czech National Bank (CNB) raised its main interest rate by 75 basis points. Benchmark European gas prices have surged more than 300%. OPEC+ likely to keep oil output policy unchanged. News starting to filter out regarding the Pandora Papers leak.  330 current and former politicians identified as beneficiaries of the secret accounts include Jordan’s King Abdullah II, former U.K. Prime Minister Tony Blair and Russian President Vladimir Putin. COVID, Australia see outbreak leveling off. US administered nearly 396 million doses of COVID vaccine. J&J seek FDA’s authorization for booster shot this week. In currency markets, US Trade Representative Katherine Tai said, the US will restart the tariff exclusion process on Chinese goods, adding that tariffs will stay in place for now. New Japan PM to call election on taking office (October 31st). Tomorrow RBA expected to keep rates the same when its rate decisions tomorrow. The JPY down 0.17%, CNY down 0.40% while AUD and NZD are around 0.22%.

The C$ pushed higher for the third successive session but, retreating oil prices as well as modest US$ strength as limited the strength. Canadian companies delay return to office citing the Delta variant.; Support remains at 1.2575, while resistance holds at 1.2670.

Eurozone’s investor sentiment worsened more than expected in October. The index fell to a 6-month low after a weaker than expected reading of 16.9 versus 19.0 expected. Support resets to 1.1565, while resistance holds at 1.1725.

EUR/GBP gained positive traction on Monday and snapped a two-day losing streak. Rising inflationary pressure in the Eurozone, the UK fuel crisis acted as a headwind for the British pound and provided a modest lift. Support holds at .8500 (1.1765) while resistance resets to .8600 (1.1628).

British military deployed to storage depot. Britain’s supply chains for everything from pork, petrol and poultry to medicines and milk have been strained to breaking point. Support holds at 1.3525 and while resistance resets at 1.3620.