October 2022 Macro Market Commentary

Bitcoin -

Bitcoin remained range bound in October between $17,500 and $21,000. There have been few catalysts to move price in either direction. As in September, risk sentiment has remained weak, with markets focused on the rising interest rates environment, as central banks seek to reign in stubbornly high inflation.

• Institutional investor surveys from multiple sources including KPMG and Fidelity Digital Assets indicate continued interest in acquiring digital assets in their portfolios including Bitcoin and Ethereum. With increased allocation to digital assets, hedging and derivative products would be required to allow effective risk management. Responders to the surveys included family offices and high-net-worth individuals.
• The United States Federal Reserve on 2nd November raised interest rates by 75 basis points to a range of 3.75% to 4 % in a move that was widely anticipated by market participants, including digital asset traders. Digital asset traders watch central banks, the Fed in particular, because the price of bitcoin often tracks U.S. equity markets; the theory is that tighter monetary policy makes risky assets less attractive.

DAILY TREND: DOWN

Bitcoin remained trapped between $21,000 and $18,500 in October. Price fell in the first two weeks toward $18,500, and then toward $21,000 in the final week of the month.

Short term price action remained sideways and the overall trend has shown no signs of changing.

XBT closed the month lower at $20,419 with a +5.5% change.

UPCOMING HIGH IMPACT EVENTS

• Spring 2024 bitcoin halving event

US Dollar -

The U.S. Dollar Index ® (USDX) closed October at 111.72 to break the four-month positive run. The USDX closed the month with a loss of 0.65%.

• Nonfarm Payrolls data released for September reported that 263,000 new jobs were created, beating expectations of 250,000 although a decline for the second consecutive month after September data posted an increase of 315,000 new jobs. The USDX closed the day at 112.68 with a gain of 0.42%.
• The Federal Open Market Committee (FOMC) minutes released on 12th October confirmed the earlier rate rise of 75 basis points at the meeting held on 21st September and clues to the Fed’s hawkish stance. The USDX closed the day at 113.22 with a small loss of 0.01%.
• Core Inflation (all items less food and energy) continued to increase over the last 12 months to reach a rate of 6.6%, up from 6.3% in August to post the highest rate seen since 1982. The USDX closed the day at 112.25 with a loss of 0.81%.

DAILY TREND: SIDEWAYS

INDEX WEIGHTING:
EUR 57.6% | JPY 13.6% | GBP 11.9% | CAD 9.1% | SEK 4.2% | CHF 3.6%

After reaching a fresh two-decade high on 28thSeptember, weakness came into the market and early October was no exception. The first day of trading the U.S. Dollar Index ® dropped as demand for the U.S. Dollar decreased with the bears firmly in control. ISM Manufacturing PMI data for September was released which showed manufacturing output declined to a rate of 50.9 compared to data released for August at 52.8. The announcement came in below market expectations of 52.2% as manufacturing growth continued its slowdown. The U.S. Dollar Index ® closed the day at 111.66 with a loss of 0.44%.

The bearish momentum continued on 4th October as money flowed out of the safe haven and into more risk based assets as U.S. stocks rallied higher. The benchmark S&P 500 had its largest two-day rally since April 2020. The U.S. Dollar Index ® closed the day in an area of support at 110-04 – 109.64 (formed on a 4-hour timeframe), just above a wider Daily support area of 109.87 – 109.04, with a loss of 1.37% at 109.98.

The bulls returned on 5th October and the U.S. Dollar Index ® rallied from the area of support aided by positive news relating to ADP Employment Change. Figures released showed private sector jobs increased by 208,000 against market expectations of 200,000 and upwardly revised prior month figures at 185,000. In addition, ISM Service PMI data for September published a rate of 56.7, whilst it showed a slowdown on the prior month of 56.9 the data was above expectations of 56. The U.S. Dollar Index ® closed with a gain of 0.85% at 111.01.

The bullish momentum gathered pace on 6th October as the U.S. Dollar Index ® extended its rally from the prior day as hawkish rhetoric observed during the past few days continued to come from Fed Officials regarding the aggressive rate hikes and concerns surrounding the outlook for 2023. The U.S. Dollar Index ® closed higher at 112.18, a gain of 1.18%.

Nonfarm Payroll data released on 7th October announced 263,000 new jobs were created during September beating market expectations of 250,000 jobs although this was a decline on the prior months reported figures of a gain of 315,000, to record the lowest monthly gain since April 2021. Data published also revealed that the unemployment rate for September had unexpectedly fallen to 3.5% (from 3.7%), matching July’s twenty-nine month low. Wages continued to rise, with average hourly earnings increasing by 0.3% matching the rise published for August and up 5.0% from a year ago. The U.S. Dollar Index ® traded higher on the day to close with a gain of 0.42% at 112.68.

The U.S. Dollar Index ® closed the trading week ending 7th October with a gain of 0.48%.

10th October trading the U.S. Dollar bulls drove the market higher and whilst the market pulled back slightly from the high of the day at 113.29 the U.S. Dollar Index ® closed the day positive at 113.07 with a gain of 0.37%.

Trading on 11th October was choppy as the bulls and the bears clashed to gain control, the bulls had the upper hand as information from the Bank of England created a drop on GBPUSD, as money moved to the safe haven of the U.S. Dollar. (The British Pound forms part of the basket of currencies the U.S. Dollar Index ® consists of). In addition, a report published by the International Monetary Fund (IMF) raised recessionary concerns and cut its 2023 global growth forecast. The U.S. Dollar Index ® closed with a gain of 0.11% at 113.13.

FOMC Minutes from the Fed’s September meeting released on 12th October indicated that higher interest rates are most likely to remain in place until inflation starts to fall. Policymakers noted the impact inflation is having on the economy and especially those on lower-incomes. The Committee had also raised their assessment path of what the Federal Funds rate would likely be to achieve their goals. In addition, some members of the Committee cited that the uncertainty in the global economic and financial environment and the outlook of U.S. economic activity would play a factor in the pace of further policy tightening.

The U.S. Dollar Index ® traded sideways for the majority of the day and closed the 12th October at 113.22 almost where it opened with a 0.01% loss.

The latest inflation figures released on 13th October showed the pace of inflation softened for a third consecutive month as Consumer Price Index (CPI) data for all items 12-month ending September announced prices rose by 8.2% falling from 8.3% the prior month. Lower rises in gasoline and fuel oil prices contributed towards the drop. The Core inflation rate, which represents all items excluding food and energy, showed another unexpected increase to 6.6% over the last 12-month period ending September, compared to data released for August at 6.3% and expectations of 6.5% to remain well above the Fed’s target rate of 2%. This represented the highest increase since 1982.

After making a high for the day at 113.85 and almost reaching the upper boundary of the Weekly Bollinger Bands combined with an area of resistance on a 4-hour timeframe at 113.92 – 114.75, the U.S. Dollar Index ® met resistance and dropped as the bears took control. The U.S. Dollar Index ® closed the day down at 112.25 with a loss of 0.81%.

As inflation is set to play a key role in interest rate decisions throughout 2022, the ICE U.S. Dollar Information Expectation Index Family is a great tool to help plan for the future. The chart below provides the historical Index setting over the past year:

On 14th October, the bulls returned and even when Retail Sales data fell below market expectations (0.2%) as sales remained flat in September, falling below the upwardly revised 0.4% increase in August the U.S. Dollar Index ® remained buoyant.

Positive data released later in the day from the Michigan Consumer Sentiment Index brought welcomed news, as it published above expected figures of 59.8 against expectations at 59 and August data at 58.6. The U.S. Dollar Index ® tested the midpoint of the Daily Bollinger Bands during the day where buyers stepped in and market rallied. The U.S. Dollar Index ® closed the day at 113.20 with a gain of 0.65%.

The U.S. Dollar Index ® closed the week at 113.20 with an overall gain of 0.49%.

Monday 17th October the U.S. Dollar Index ® bears returned as money flowed out of the safe haven, partly driven by positive reactions the equity markets had with the UK doing a U-turn on the previously announced mini-budget. Investors were also cautious of any central bank intervention from the Bank of Japan (the Yen forms part of the currency basket). The U.S. Dollar Index ® dropped throughout the trading day, broke through the midpoint of the Daily Bollinger Bands to rest on the Daily 20 EMA. The U.S. Dollar Index ® closed with a loss of 1.12% at 111.91.

On 18th October, the U.S. Dollar Index ® traded sideways throughout the day and closed at 111.99 with a modest gain of 0.02% after finding continued support from the Daily 20 EMA. The bulls returned on 19th October and the U.S. Dollar Index ® rallied to close up with a gain of 0.95% at 112.88.

After a bearish start to trading on 20th October, the Daily 20 EMA once again provided support and the bulls returned. The market rallied and recaptured some of the earlier losses. The U.S. Dollar Index ® closed the day at 112.82 down 0.07%.

On 21st October the market rallied during early trading although it just fell short of an area of resistance at 113.92 – 114.75 (formed on a 4-hour timeframe) when sellers stepped in. The bears returned and the U.S. Dollar Index ® dropped throughout the majority of the day. The U.S. Dollar Index ® closed at 111.98 with a close of 0.77% just below the Daily 20 EMA that had previously acted as support.

The U.S. Dollar Index ® closed the week with an overall loss of 1.05% at 111.98, the largest weekly loss since July 2022.

The U.S. Dollar bulls drove the market higher on 24th October to reach a high of 112.47 where it met resistance as it tested the midpoint of the Daily Bollinger Bands. The bears returned and the U.S. Dollar Index ® dropped until it found support towards the end of the trading day. The U.S. Dollar Index ® closed at 111.91 with a gain of 0.27%.

The bears regained control during trading on 25th October and the U.S. Dollar Index ® traded lower throughout the day to close down at 110.83 with a loss of 0.88%. The bearish moment gathered pace on 26th October as money continued to move away from the safe haven. The U.S. Dollar Index ® closed at 109.55 with a loss of 1.16% inside a Daily area of support at 109.87 – 109.04.

The buyers returned on 27th October as the demand for the U.S. Dollar increased and the market rallied from this support area. Data released for Durable Goods Orders for September showed an increase in orders at 0.4% after August's revised figures published an increase of 0.2% (upwardly revised from -0.2%) although slightly short of market expectations of 0.6%.

Nondefense Capital Goods Orders ex. Aircraft also released on 27th October showed significant decline as data published a drop to -0.7% markedly below expectations of 0.5% and the downwardly revised 0.8% data released for August (revised from 1.3).

Also out on 27th October was GDP data (preliminary) which brought welcomed news as the U.S. economy expanded by an annualized 2.6% for quarter three, exceeding expectations of 2.4% and a significant increase after the prior two negative quarters. The U.S. Dollar Index ® closed up at 110.45 with a gain of 0.92%.

On 28th October, the market continued to rally and the U.S. Dollar Index ® reached a high of 110.93, when it met resistance and the bears returned which caused the market to pullback. Nonetheless, the U.S. Dollar Index ® closed the day 110.61 with a gain of 0.19%.

The final week of October trading the U.S. Dollar Index ® closed the week with a loss of 0.90% at 110.61.

The bullish momentum continued on 31st October and the market rallied. The U.S. Dollar Index ® closed the final day of October trading at 111.42 with a gain of 0.67%.

Overall, the U.S. Dollar Index ® closed the month with a loss of 0.65% at 111.42 to end the prior four-month streak of positive closes. The uptrend remained intact on the weekly timeframe although we have seen a pullback on the daily timeframe and the market transitioned into a sideways trend.

UPCOMING HIGH IMPACT EVENTS

• Tue 1 Nov ISM Manufacturing PMI (Oct)
• Wed 2 Nov ADP Employment Change (Oct)
• Wed 2 Nov Fed Interest Rate Decision
• Wed 2 Nov Fed’s Monetary Policy Statement
• Wed 2 Nov FOMC Press Conference
• Thr 3 Nov ISM Services PMI (Oct)
• Fri 4 Nov Nonfarm Payrolls (Oct)
• Thr 10 Nov Consumer Price Index (Oct)
• Fri 11 Nov Michigan Consumer Sentiment (Nov) PREL
• Wed 16 Nov Retail Sales (Oct)
• Wed 23 Nov FOMC Minutes
• Fri 25 Nov Durable Goods Orders (Oct)
• Fri 25 Nov Nondefense Capital Goods Orders ex. Aircraft (Oct)
• Mon 28 Nov Gross Domestic Product Annualized (Q3) PREL
• Wed 30 Nov ADP Employment Change (Nov)

South Korean Won -

The South Korean Won regained some ground against the U.S. Dollar to close at 1425.57 KRW against the U.S. Dollar after trading to a high of 1445.80 the weakest in 13-years. The South Korean Won closed the month with a gain of 1.00%.

• S&P Global Manufacturing PMI data continued to decline as data released on 4th October posted a drop to 47.3 for September, a marginal decline from 47.6 released for August.
• Consumer Price Index (CPI) all items 12-month ending September released on 4th October showed inflation had eased for a second consecutive month to 5.6% down from 5.7%. The data released was below market expectations of a 5.7% increase.
• Industrial Production data published on 30th October for 12-month ending September recorded a slight increase of 0.8% although a drop on the prior months' revised figures of 1.5 % (revised upwards from 1.0%) and below market expectations of 0.9%. Monthly data published for month ending September showed a further decline at -1.8% against expectations of a decline of 0.3% and the prior month release of -1.4% (revised upwards from previous figure -1.8%).

DAILY TREND: UP/SIDEWAYS

3rd October trading the USDKRW met resistance at the upper boundary of the Daily Bollinger Bands. The bears gained control and the USDKRW dropped to close the first day of October trading down at 1431.58 with a loss of 0.58%.

The bearish momentum continued into the following trading day and the USDKRW closed lower. After a brief pause on 5th October when the pair closed with no change, the bears regained control. The USDKRW traded below the midpoint of the Daily Bollinger Bands until the pair reached an area of support at 1397.76 – 1394.99 (on a 2 –hour timeframe). Demand for the U.S. Dollar returned and the pair recovered some lost ground to close just above the Daily 20 SMA at 1407.61 on 6th October.

The pair continued to trade higher on 7th October and the USDKRW closed with a 0.56% gain at 1415.46.

The USDKRW ended the first week of October trading with a loss of 1.70%.

On 10th October the U.S. Dollar bulls drove the pair higher and the USDKRW closed up for two consecutive days with a gain of 1.12% over this period. The bears returned on 12thOctober and the USDKRW traded lower although it failed to return to the midpoint of the Daily Bollinger Bands as the Daily 10 SMA provided support. The bulls took over on 13th October and the pair rallied although it met sellers when the pair reached a resistance area at 1441.12 – 1444.91(on a 2-hour timeframe) and dropped. Nonetheless, the USDKRW closed with a gain of 0.44%.

On the final trading day of the week, the bulls drove the pair higher and the USDKRW closed at 1440.42 with a gain of 0.68%.

The USDKRW closed the week with an overall gain of 1.76% to recover the prior week losses.

The bullish sentiment from Friday’s trading was short lived as the bears returned when the pair retested the area of resistance at 1441.12 – 1444.91 and dropped heavily throughout Monday's trading. The USDKRW closed down at 1430.25 with a loss of 0.71%. The bearish momentum continued and on 18th October, the pair traded to a low of 1418.68 before the bulls returned. The USDKRW lifted from the lows to close at 1424.61 with a loss of 0.39%.

19th October the bears returned in early trading and the pair dropped to a low of 1414.28, just breaking the prior week low before the bulls returned and propelled the USDKRW higher. The pair closed the day at 1434.51 with a gain of 0.64%.

20th October the pair failed to reach the prior day high when weakness crept in and the USDKRW dropped, the pair closed with a loss of 0.32%.

21st October the USDKRW reached a high of 1440.88 where the bears returned and the pair dropped heavily to lose the day's earlier gains to close down at 1428.30, with a loss of 0.08% on the day.

The USDKRW closed the trading week at 0.84%.

Trading on 24th October was range bound throughout the day after the USDKRW opened the new trading week within the area of resistance at 1441.12 – 1444.91 before dropping heavily throughout the 25th October. This bearish momentum extended into trading on 26th October until the USDKRW traded into an area of support at 1411.02 – 1409.07 where the buyers returned and the pair stopped falling. The market rallied from this area on 27th October to close with a 0.60% gain although the pair struggled to gain much traction in either direction on 28th October and closed up 0.06%.

The USDKRW closed the week at 1421.64 with a loss of 1.54%.

The final trading day of October the USDKRW closed at 1425.57 with a gain of 0.28%.

The uptrend continued on both the weekly and daily timeframes. Although the USDKRW traded sideways throughout October.

The USDKRW closed the month at 1425.57 with a loss of 1.00%, the first monthly gain for the South Korean Won since May 2022. After reaching a fresh 13-year low against the U.S. Dollar at 1445.80.

UPCOMING HIGH IMPACT EVENTS

• No major events listed

Singapore Dollar -

The Singapore Dollar after trading to a high of 1.4413, closed the month stronger against the U.S Dollar at $1.4155, a gain of 1.35%. The strongest monthly performance by Singapore Dollar since November 2020.

• PMI Manufacturing data released on 3rd October showed a further decline, this time dropping below the 50.0 benchmark to 49.9 for September, slightly down on the previous month of 50.0.
• Consumer Price Index (CPI) data released on 25th October showed inflation whilst remained high, leveled off as CPI all items for 12-month ending September recorded an increase of 7.5% which equaled the 14-year record increase published in August. Core inflation jumped to 5.3% for 12-month ending September to record a near 14-year high, the sharpest rise since 5.5% seen in November 2008.
• Industrial Production data released on 26th October showed an increase in manufacturing output for the period 12-month ending September as manufacturing rose by 0.9%, falling short of market expectations of 1.3%. September month on month data showed manufacturing output unexpectedly declined to 0%, significantly below expectations of 1.1% and August data of 1.6% (revised downwards from 2%).

DAILY TREND: DOWN

A bearish start to October trading as the USDSGD closed lower for the first two trading days, losing 0.84% of its value during this time.

The U.S. Dollar bulls returned when the USDSGD reached a low of 1.4199 on 5th October, which coincided with a Daily area of support at 1.4222 – 1.4146 that enveloped the Daily 20 EMA. The pair took a bounce to close up at 1.4236 with a 0.07% gain.

After a brief sell off on 6th October, USDSGD again found buyers from the Daily support area and 20 EMA. The pair rebounded to close the day with a gain of 0.32% at 1.4280. This bullish momentum continued throughout the remainder of the week.

The USDSGD closed the first week of October trading at 1.4329 with a loss of 0.13%.

The pair traded higher on 10th October until the USDSGD reached a high of 1.4386 and pulled back. The USDSGD closed the day at 1.4359 with a gain of 0.21%.

The bullish momentum continued on 11th October and the pair reached a high of 1.4411 and tested a resistance area at 1.4375 – 1.4439 (on a 4-hour timeframe) and dropped slightly. The USDSGD closed at 1.4380 with a 0.09% gain.

The USDSGD pushed higher during early trading on 12th October to breach the prior day and traded back into the resistance area and the bears returned. The bearish momentum gathered pace during the remainder of the week and the USDSGD posted three days of consecutive losses to close the week at 1.4262 with a loss of 0.47% at 1.4262.

This loss on the USDSGD equates to the strengthening of the Singapore Dollar, as this is the quote currency.

The bearish momentum continued on Monday 17th October and the pair dropped through the midpoint of the Daily Bollinger Bands and the Daily 20 EMA, which previously acted as support. The USDSGD closed the day at 1.4200 within the Daily support area at 1.4222 – 1.4146 with a loss of 0.43%.

The bulls returned on 18th October as the pair reached the lower boundary of the Daily Bollinger Bands (combined with the support area) and the pair pulled back from the low. The USDSGD closed with 0.01% gain at 1.4203.

The bullish momentum picked up pace on 19th October and the pair retested the Daily 20 EMA but could not close back above. The USDSGD closed the day at 1.4243 with a gain of 0.27%.

The following trading day both bulls and bears struggled to gain overall control and the USDSGD closed at 1.4230 with a small loss of 0.07%.

The bears drove the pair lower on the final trading day of the week to test the lower boundary of the support area. The USDSGD closed with a loss of 0.62% at 1.4145.

The USDSGD closed the week with a loss of 0.82%, the strongest performance of the month for the Singapore Dollar against the U.S. Dollar.

A bullish start to trading on 24th October as the USDSGD found support at the lower boundary of the Daily Bollinger Bands to close up with a 0.49% gain.

The bullish sentiment was short lived as the bears returned on 25th October and the USDSGD closed lower for the following two consecutive trading days. The pair broke below the support area and closed at 1.4049 with a loss of 1.19% over the two days.

On 27th October, the bulls returned and the pair rallied to close the day up with a gain of 0.28% at 1.4089. However, the pair struggled to gain much ground on the final trading day of the week to close with a modest gain of 0.09%.

The USDSGD closed the week with a loss of 0.28% at 1.4106.

On the final day of trading, the USDSGD closed at 1.4155 with a gain of 0.34%.

On a daily timeframe the USDSGD formed a downtrend. The weekly uptrend remained. The USDSGD closed the month with a loss of 1.35% at 1.4155.

UPCOMING HIGH IMPACT EVENTS

• No major events listed

Chinese Yuan -

The Chinese Yuan Renminbi recorded a fresh new low against the U.S. Dollar after losing 2.67% of its value during October trading to close at 7.3319 CNY to the U.S. Dollar.

• Consumer Price Index (CPI) data released on 14th October showed inflation increased to an annual rate of 2.8% for 12-month ending September. This increase was in line with expectations and above the 2.5% reported for 12-month ending August.
• Retail Sales figures published on 24th October for 12-month ending September showed an unexpected decline to 2.5% against 3.3% expected and significantly below 5.4% reported for 12-month ending August. Much of the decline was attributed to the impact of strict COVID restrictions in several large cities.
• The NBS Manufacturing PMI data released on 31st October showed a decline in manufacturing output for October with a drop to 49.2 against 50.1 reported for September and below market expectations of 50. Non-Manufacturing PMI data for October showed a sharp decline as figures released 48.7 for October against 50.6 for September and below expectations of 51.9.

DAILY TREND: UP

After creating an all-time high on 28th September at 7.2672, the USDCNH continued its descent as the bears took control and the first two days of October trading was no exception. The USDCNH dropped to close down 1.54% at 7.0308 during this period and closed below the midpoint of the Daily Bollinger Bands for the first time in six weeks.

Strength returned as the U.S. Dollar bulls regained control on 5th October after the pair reached a Daily support area at 7.0257 – 6.9907 and the USDCNH closed back above the midpoint of the Daily Bollinger Bands. The USDCNH subsequently closed positive for the following three consecutive days as the demand for the U.S. Dollar increased.

The USDCNH ended the trading week with a loss of 0.19% to close at 7.1273.

The bullish momentum continued the following week as the USDCNH broke the prior week high on 10th October to close at 7.1547 with a gain of 0.42%.

Throughout the remainder of the week, the USDCNH closed positive, although it met selling pressure each time the pair reached the upper boundary of the Daily Bollinger Bands which acted as resistance. Sellers stepped in and forced the pair lower on multiple days and so whilst the USDCNH closed positive some days the gains made were only slight.

The USDCNH closed the week with a gain of 0.95%.

On 17th October, the USDCNH dropped as the pair approached the upper Boundary of the Daily Bollinger Bands and the bears returned. The USDCNH closed down 0.13% at 7.2066 and broke the eight-day streak of higher closes.

The bulls returned on 18th October as the demand for the U.S. Dollar increased. The USDCNH posted two consecutive higher daily closes and broke the previous all-time high at 7.2672 although failed to close above. Nonetheless, the USDCNH gained 0.87% over this period and closed outside the upper boundary of the Daily Bollinger Bands.

The bears returned the following day after the pair pushed through the prior days high where it met resistance. The USDCNH closed lower for the final two trading days of the week.

The USDCNH closed the week with an overall gain of 0.17% at 7.2279, to represent continued weakness of the Yuan against the U.S. Dollar.

The bulls returned on 24th October and the USDCNH rallied strongly throughout the day smashing through the previous all-time high and closing convincingly above at 7.3222 with a gain of 1.32%.

The bullish move continued into trading on 25th October. The pair again blasted through the previous all-time high to create a new high at 7.3748. The weakest value the Yuan has traded against the U. S. Dollar.

It was at this point sellers stepped in and drove the pair lower to close the day down at 7.3068 down 0.24%.

The bearish momentum continued into the following day and the USDCNH closed at 7.1912 with a loss of 1.58%, the largest one-day loss of the month.

The USDCNH bulls returned on 27th October after support was found at the midpoint of the Daily Bollinger Bands and the pair rallied to close the day with a gain of 0.77%. This continued into trading on the final day of the week and the pair closed with a gain of 0.23%.

The USDCNH ended the week at 7.2655 with a gain of 0.53%.

The bullish momentum continued throughout the final day of trading. The USDCNH closed up with a gain of 0.87% at 7.3319.

USDCNH remained in an uptrend on both the daily and weekly timeframes. The USDCNH closed the month at 7.3319, with a gain of 2.67%. The weakest the Yuan has traded against the U.S. Dollar.

UPCOMING HIGH IMPACT EVENTS

• Wed 9 Nov CPI (Oct)
• Tue 15 Nov Retail Sales (Oct)
• Mon 30 Nov NBS–Manufacturing & Non–Manufacturing PMI (Nov)

Asia Tech -

The ICE Asia Tech 30 Index (ATI) set a new low on 25th October, as Chinese component stocks, which make up 37% of the index, continued to weaken affecting the overall index price. The risk off sentiment for equities had not changed since September given the weak economic outlook expected in the coming months.

• Chinese component stocks all performed negatively with the largest falls from Bilibili, Inc. down 43.2%, and Kuaishou Technology down by 36.6%. Internet giant Baidu, Inc. was also down 34.2% in the month.
• Taiwan stock components were mostly positive with United Microelectronics Corp. up by 9.4% and MediaTek Inc higher by 7.1%. Taiwan Semiconductor Manufacturing was down by 7.6%.
• For the Japanese index components, the largest rise was seen in Keyence Corporation up by 17.6% and NTT Data Corporation which rose 15.6%. Two other notable increases by around 10% were Tokyo Electron Ltd. and Murata Manufacturing Co.
• Korean component stocks were mixed with Samsung SDI up by 35% and Samsung Electronics rising by 11.9%. Kakao fell by 11.2% and Naver Corp was down 12.4%.

DAILY TREND: DOWN

ATI followed the continued weakness in the equity markets. A new low was set by the index at $2,450 on 25th October.

ATI closed the month at $2,521 with a -6.4% change.

Index Composition: 37% China, 23% Japan, 23% Taiwan and 17% South Korea

UPCOMING HIGH IMPACT EVENTS

• Wed 9 Nov China CPI (Oct)
• Tue 15 Nov Retail Sales (Oct)
• Wed 30 Nov China Non-Manufacturing PMI (Nov)

Oil -

ICE Brent Crude almost reached $97.00 mid-October with the announcement by OPEC+ on 5th October that 2 million barrels will be cut from supply in November. Price fell towards $88.00 after the market digested the announcement, with price recovering to the $95.00 level at the close of the month.

• OPEC+ is next set to meet again on Sunday 4th December. Oil prices jumped on the news of the 2 million barrels per day cut announced in early October. Concerns have been raised by the United States and India on the impact these cuts could have on oil and gas prices, and consumers affected by the higher energy induced inflation. The United States in particular has urged producers to reconsider these cuts.
• The International Energy Forum (IEF) has expressed concerns that Brent oil prices could reach $100 when European Union sanctions on Russia come into effect in December. The IEF estimates that reductions of between 1 million to 3 million barrels per day could be seen impacting supply to the oil market. Ahead of the embargo, Russia is reported to have shipped over 1 million barrels of oil to Asia where it is being stored in offshore tankers.

DAILY TREND: DOWN

Brent rose in the early part of October towards $97.00 as the oil market digested the 2 million barrel per day production cut announced by producers for November. Price retreated toward $88.00, and recovered towards $95.00 as the month drew to a close. Brent closed the month at $92.81 with a +10.2% change.

UPCOMING HIGH IMPACT EVENTS

• Sun 4 Dec OPEC+ policy meeting to decide on whether to decrease supply of oil or hold it steady as price continued to fall.

Key Figures -

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TRADDICTIV · Research Team