This is what you need to know to trade today Thursday October 13:
After Wednesday’s choppy action in the markets, the dollar remains quiet in the early hours of Thursday. Waiting for the data consumer price index (CPI) for September, the DXY dollar index is trading in a narrow range above 113.00. US stock index futures are trading flat on the day and the 10-year US Treasury yield remains below 4%. Investors will also be watching UK Gilt markets closely as the Bank of England (BoE) nears the expected end of its Gilt flash purchase program.
See: US CPI Preview: High Expectations May Trigger Dollar Buying Opportunity – Three Scenarios
US annual CPI expected to decline to 8.1% in September from 8.3% in August. Core CPI, which excludes food and energy price volatility, is forecast to rise to 6.5% from 6.3%. Meanwhile, the CME Group’s FedWatch tool shows that markets are pricing in an 81.3% chance of a further 75bp interest rate hike in November.
See: US CPI Preview in September: Monthly core inflation is the figure to watch
The BoE it will wrap up its emergency bond-buying program on Friday, as scheduled. On Thursday, the central bank accepted offers worth £1.96bn and £2.37bn in purchases of long and indexed Gilts, respectively. Bank of England Chief Economist Huw Pill said a significant policy response would still be needed in November and the British pound remained strong. GBP/USD gained over 150 pips on Wednesday and snapped a five-day losing streak. Meanwhile, Bloomberg reports that Finance Minister Kwasi Kwarteng I would blame the BoE in case Gilt yields rise next week. At the time of writing, the pair GBP/USD trading in negative territory, around 1.1070.
The President of the European Central Bank (ECB), Christine Lagarde, announced on Wednesday that discussions on quantitative tightening have begun, but noted that the interest rate remains its main policy tool. On Wednesday, the EUR/USD failed to make a decisive move in either direction and continues to move sideways near 0.9700 early on Thursday. Data from Germany showed that the annual CPI was 10% in September, coinciding with the preliminary estimate and the market expectation.
The USD/JPY exceeded the level that triggered monetary intervention in late September and rose to a new multi-decade high at 147.00 before entering a consolidation phase below that level. Japanese Finance Minister Shunichi Suzuki again said that they are prepared to take action against speculative moves in the yen.
The prices of Raw oil fell on Wednesday for the third day in a row and the barrel of West Texas Intermediate (WTI) touched its lowest level in a week, settling at $86.25, amid renewed concern about the outlook for oil demand. WTI remains calm around $87.00 in early European morning.
The Prayed closed in positive territory amid lower US yields on Wednesday, but failed to carry over its bullish momentum into Thursday. At time of writing, XAU/USD posts small daily losses just below $1,670.
The Bitcoin continues its downward trend for the third day in a row and trades near $19,000. The ethereum failed to make a convincing bounce on Wednesday and falls below $1,300 early on Thursday.
Source: Fx Street
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