EXECUTIVE SUMMARY:
UK (BBG): Leadership Vote May Delay Oct. 31 Budget Plan, Officials Say
The UK Treasury may be forced to delay its long-awaited Oct. 31 fiscal plan because of the resignation of Prime Minister Liz Truss, adding a layer of political risk to an event that had become crucial for markets and the Bank of England.
Chancellor of the Exchequer Jeremy Hunt is still working toward delivering the statement on Oct. 31, but the final decision on scheduling the statement will be a matter for Truss’s successor, two people familiar with the matter said, speaking on condition of anonymity. It also relies on Hunt remaining as chancellor under a new leader.
UK (MNI): Conservatives Hit 14% Support in Latest Poll, Lowest Score Ever
The latest opinion poll from People Polling has the governing centre-right Conservative party securing just 14% support, the lowest level of backing ever recorded by the oldest political party in the world in a Westminster voting intention poll.
ITALY (MNI): Meloni - We Are Ready to Form Gov't as Quickly as Possible
Wires carrying comments from right-wing nationalist Brothers of Italy (FdI) party head Giorgia Meloni, in which she states that her name has been put forward by the election-winning centre-right coalition to serve as PM, and that the group is ready to form a gov't 'as quickly as possible'. President Sergio Mattarella likely to offer the mandate to Meloni given the prospective coalition commands a majority in both houses of the Italian parliament.
JAPAN (MNI): USD/JPY Surges to New High on Spending Package Headlines
USD/JPY breaks to new highs following Kyodo reports flagging a Y20trl spending package. The report sees the package subject to cabinet approval as soon as Oct 28th. The total spending looks to have been downsized after LDP officials saw "an economic stimulus package of ~30t yen" on Oct 18th.
JAPAN (MNI): BOJ Warns of Prolonged Stress Due to Rate Hikes
The Bank of Japan’s Financial System Report released on Friday warned of prolonged stress from rate hikes by central banks, although financial institutions were assessed to have sufficient capital and liquidity.
“The period of stress may be prolonged further as policy rate hikes by central banks are continued and concerns about a slowdown in foreign economies are spreading. Financial and capital markets have continued to be nervous,” the FSR said.
JAPAN (MNI): BOJ To Keep Easy Policy to Hit Price Target - Kuroda
Bank of Japan Governor Haruhiko Kuroda said on Friday that the BOJ will maintain easy policy in order to achieve the price stability target in a stable and sustainable manner accompanied with wage hikes. “Japan’s consumer price will increase the year-on-year rise toward the end of this year due to high prices of energy, food and durable goods,” said Kuroda at the general meeting of Shinkumi Bank.
JAPAN (MNI): BOJ Studies Inflation Risks; Wages in Focus
Bank of Japan officials currently view the upside risk to inflation as small, but they are focused on how corporate price-setting and the economy evolves from January as they seek to avoid making the same mistake as the Federal Reserve did in underestimating the threat of inflation, MNI understands.
If the BOJ gains confidence that inflation is edging higher, it may allow the bank to start considering a change in the outlook for monetary policy. Japan's core CPI rose at a 3% y/y pace in September.
CHINA (MNI): China Seen to Cut 5-Year LPR To Lift Property
China's key reference lending rate for loans of over five years is expected to be cut to help lower mortgage rates as the government steps up efforts to support the ailing property market.
The Loan Prime Rate, which is based on the People’s Bank of China’s Medium-term Lending Facility (MLF) rate and quotes submitted by 18 banks, remained at 3.65% for the one-year maturity and 4.3% for over-five-years on Thursday, which was in line with market expectations.
CHINA (MNI): APEC Should Coordinate on Inflation, Energy - China
Asia-Pacific Economic Cooperation members should deepen economic connections and insist on “real” multilateralism as economies across the region confront a slowdown in growth, said China's Minister of Finance Liu Kun at an APEC meeting on Thursday. Liu called for policy coordination between APEC members to jointly deal with the global challenges of inflation, grain and energy security, and regional financial risks, according to the Ministry of Finance website.
JAPAN (MNI): Sep Core CPI Rises 3%; Highest Since 1991
UK (MNI): Retail Sales Slump As Households Squeezed
SWEDEN SEP UNEMPLOYMENT 6.5%
SOUTH KOREA (MNI): Export Growth to China Continues to Weaken
South Korea's first 20-days trade data for October still points to a softening external demand backdrop. Exports for the first 20-days of the month were -5.5%y/y, a slight improvement on last month's -8.7%. However, average daily exports were -9% lower in y/y terms. Note exports for the full month of September were +2.7% y/y.
Despite early Friday weakness, EUROSTOXX 50 futures maintain a firmer tone this week following the recent recovery from 3251.00, Oct 13 low. The move higher has resulted in a break of the 50-day EMA and resistance at 3492.00, the Oct 6 high and a bull trigger. Initial firm support is at 3352.00, the Oct 14 low. Similarly, recent weakness in S&P E-Minis has done little to damage the firmer short-term tone. A bullish theme follows last week’s reversal from 3502.00, the Oct 13 low. The recovery suggests the contract has entered a corrective phase and if correct, this is allowing an oversold trend condition to unwind. Attention is on resistance at 3820.00, the Oct 5 high and a bull trigger. Key support is unchanged at 3502.00. Initial support is at 3590.50, the Oct 17 low.
WTI futures failed to hold on to yesterday’s gains. The outlook remains bearish and a resumption of weakness would open $79.63 a Fibonacci retracement and potentially $75.70 further out, the Sep 26 low. On the upside, a stronger reversal higher would instead expose the key short-term resistance at $92.34, the Oct 10 high. Initial firm resistance to watch is at $88.66, Oct 12 high. Gold is trading lower. The yellow metal maintains a bearish tone following the recent reversal from $1729.5, Oct 4 high. The move lower signals the end of the bull phase between Sep 28 - Oct 4 and note that price has moved below the trendline resistance drawn from the Mar 8 high. Sights are on the key support and bear trigger at $1615.0, the Sep 28 low. On the upside, clearance of $1729.5 is required to reinstate a bullish theme.
Date | GMT/Local | Impact | Flag | Country | Event |
21/10/2022 | 1230/0830 | ** | ![]() | CA | Retail Trade |
21/10/2022 | 1310/0910 | ![]() | US | New York Fed's John Williams | |
21/10/2022 | 1400/1600 | ** | ![]() | EU | Consumer Confidence Indicator (p) |
21/10/2022 | 1530/1130 | ![]() | US | San Francisco Fed's Mary Daly | |
21/10/2022 | 1600/1200 | ** | ![]() | US | Treasury Budget |