Sterling Dives after Dovish BoE Hike, Dollar Accelerates up
| Action Insight Mid-Day Report 11-3-22 |
Sterling Dives after Dovish BoE Hike, Dollar Accelerates up |
Sterling dives sharply after dovish BoE rate hike, which saw two doves dissented. Aussie and Kiwi are following as next weakest as risk-off sentiment persists. Dollar's post-FOMC rally is accelerating, partly supported by expectation of a higher terminal rate for Fed, and partly by risk aversion. Yen is following as next strongest, and then Canadian, while Euro and Swiss Franc are mixed. Technically, as Sterling's selloff picks up, focus will be on 0.8779 minor resistance in EUR/GBP, 164.95 minor support in GBP/JPY, and 1.1283 resistance turned support in GBP/CHF. Firm break of these levels will at least trigger squaring of position built up from the spike low during Liz Truss's era in September. In particular, for GBP/CHF, that would set up deeper decline to 1.0893 support. In Europe, at the time of writing, FTSE is down -0.72%. DAX is down -1.67%. CAC is down -1.27%. Germany 10-year yield is up 0.143 at 2.281. Earlier in Asia, Nikkei dropped -0.06%. Hong Kong HSI dropped -3.08%. China Shanghai SSE dropped -0.19%. Singapore Strait Times dropped -1.23%. Japan 10-year JGB yield is down -0.0052 to 0.247. |
GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.1330; (P) 1.1447; (R1) 1.1507; More... GBP/USD's break of 1.1256 suggests that rebound from 1.0351 has completed with three waves up to 1.1644, ahead of 1.1759 support turned resistance. The development retains larger bearishness. Intraday bias is back on the downside for 1.0922 support first. Break there will target a retest on 1.0351 low. For now, risk will stay on the downside as long as 1.1644 resistance holds, in case of recovery. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 00:30 | AUD | Trade Balance (AUD) Sep | 12.44B | 9.00B | 8.32B | 8.66B | | 01:45 | CNY | Caixin Services PMI Oct | 48.4 | 49.2 | 49.3 | | 07:30 | CHF | CPI M/M Oct | 0.10% | 0.20% | -0.20% | | 07:30 | CHF | CPI Y/Y Oct | 3.00% | 3.20% | 3.30% | | 09:30 | GBP | Services PMI Oct F | 48.8 | 47.5 | 47.5 | | 10:00 | EUR | Eurozone Unemployment Rate Sep | 6.60% | 6.60% | 6.60% | 6.70% | | 11:30 | USD | Challenger Job Cuts Y/Y Oct | 48.30% | 67.60% | | 12:00 | GBP | BoE Interest Rate Decision | 3.00% | 3.00% | 2.25% | | 12:00 | GBP | MPC Official Bank Rate Votes | 9--0--0 | 9--0--0 | 9--0--0 | | 12:30 | CAD | Building Permits M/M Sep | -17.50% | -4.90% | 11.90% | | 12:30 | CAD | Trade Balance (CAD) Sep | 1.1B | 1.1B | 1.5B | | 12:30 | USD | Trade Balance (USD) Sep | -73.3B | -70.3B | -67.4B | -65.7B | | 12:30 | USD | Initial Jobless Claims (Oct 28) | 217K | 215K | 217K | 218K | | 12:30 | USD | Nonfarm Productivity Q3 P | 0.30% | -0.10% | -4.10% | | 12:30 | USD | Unit Labor Costs Q3 P | 3.50% | 4.00% | 10.20% | | 13:45 | USD | Services PMI Oct F | 46.6 | 46.6 | | 14:00 | USD | ISM Services PMI Oct | 55.2 | 56.7 | | 14:00 | USD | Factory Orders M/M Sep | 0.30% | 0.00% | | 14:30 | USD | Natural Gas Storage | 99B | 52B |
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