Market Update – September 14 – Inflation IS Sticky – Risk Off

USDIndex – Exploded higher (to110)ending a 4 day dip. US CPI much hotter than expected.  Fed Funds Futures – a 34% chance of 100bp – from 0% this time yesterday. The inflation may still have peaked but it is NOT receding as quickly as some expected,  Inflation is ALWAYS sticky and takes often longer to get under control.

EUR – Trades at 0.9980 now from a test of 0.9950 yesterday, 1.0000 resistance.
JPY BOJ apparently conducting rate checks ahead of intervention. The pair hit 145.00 yesterday from 142.00 and trades at 143.75 now following the BOJ chatter.
GBP traded over 1.1700 yesterday ahead of the US data,  but tanked under 1.1500 to 1.1485 and holds at 1.1500 now.  
Stocks US stocks had their worst day since June 2020 (S&P500 -4.32% 177pts  3932) FUTS trade at 3940. NASDAQ worst performer (-5.16%)  Asian stock markets down over -2.5%, with European FUTS showing some resilience (-0.4%).

USOil topped at $89.00 again on Tuesday, crashing to the key $85.00 level before recovering to $87.00 now. 20-day moving average sits at $89.00.
Gold – also tested lower under $1700 from $1730 and holds at $1700 now.
BTC – slumped from $22.7 highs to $19.8k and holds at $20.2k now.

Overnight & Today – UK inflation a tick lighter at 9.9% vs 10.0% & 10.1% last month, US PPI, New Zealand GDP, Speeches from European Commission State of Union Address & ECB’s Lane.

Biggest FX Mover @ (06:30 GMT) AUDJPY (-0.87%) The BOJ gossip and risk off mood has lifted safe haven YEN. Collapsed under 98.00, 97.00 & 96.50. MAs aligning lower, MACD histogram & signal line negative & falling, RSI 20.85 & OB, H1 ATR 0.241, Daily ATR 0.972.


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Stuart Cowell

Head Market Analyst

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