Market Update – November 16 – Risk aversion picked up

The USDIndex’s safe-haven gains fizzled and held at the low 106.00 area. Yields had plunged on the PPI data, but 5-year closed at 3.890%, the 2-year at 4.326%, and the 10-year at 3.772%, respectively. Stocks supported by cooler PPI but pressured afterwards as news of a Russian-made missile strike in Poland sparked fears of heightened geopolitical tensions. US President Biden who said the missile was unlikely to have been fired by Russia helped to calm nerves.
EUR – retests once again the 1.040.
JPY – holds at 139.50, while Risk-sensitive Antipodeans, AUDUSD is up at 0.6782, and NZDUSD at 0.6175.  Australian wages boasted the largest rise in a decade last quarter as a super-tight labour market finally made itself felt, raising the risk of further rate hikes.
GBP – steady at 1.1860 – UK CPI jumped to 11.1% y/y in October from 10.1% y/y in the previous month. Core inflation failed to decelerate as anticipated and held steady at 6.5% y/y.

Stocks – closed in the green with gains of 1.45% on the US100, 0.87% on the US500, and 0.17% on the US30. But they are well off of early highs where the future showed the US100 knee-jerking nearly 3% on the data, while the US500 was up 1.9%, with the US30 up over 1.1%. Better than expected earnings/guidance from Walmart and hopes for a bounce in Chinese growth supported too.
USOil – at $85.95
Gold – jumps to 1787, but steady so far today.

Today: US Retail Sales and Canadian Inflation along.

Biggest FX Mover @ (06:30 GMT) EURJPY retested the 145.30 highs, MAs aligning higher, MACD line turned positive but signal line remains below 0, RSI 59 btu flattened. H1 ATR 0.391, Daily ATR 1.691. 

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Andria Pichidi

Market Analyst

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