FOREX: USDJPY Surges Through 157.00 On BoJ
- USDJPY is rallying well early Friday, rising over 1% to clear the 156.95 December 9 high as the lack of meaningful, hawkish guidance from BoJ Governor Ueda following the expected target rate hike weighs on JPY. The BoJ did signal it will continue raising rates in line with improvements in growth, wages and inflation, while maintaining accommodative conditions to support the economy - but this fell well short of any firmer commitment on tightening.
- Price action does strengthen bullish conditions in the pair, opening back up the 157.89 November 20 high and bull trigger. Above 158.00, the January 10 high and key resistance stands at 158.87. Speculative positioning may well prevail in terms of short-term drivers for spot as volumes remain high in recent trade.
- GBP meanwhile outperforms as markets digest yesterday's BoE meeting as well as follow-up comments from Governor Bailey this morning, in which he repeated that the Bank is getting nearer to the neutral rate. Despite this, GBPUSD is seeing only limited volatility as the JPY weakness spills over into USD markets. GBPUSD trades within range of resistance at the Dec 16 high of 1.3456 and support the Dec 17 low at 1.3312.
- NZDUSD pierces below its 20- and 50-day EMAs at 0.5748 as RBNZ hiking expectations have been pared to some extent this week. Some room for further adjustment remains, however.
- NY Fed's Williams is scheduled to appear on CNBC later. There are a host of Governing Council speakers scheduled today, where we don't expect meaningful departures from the ECB's central guidance, but will continue to monitor for nuances in view. Michigan inflation expectations and sentiment are on the data calendar.
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COMMODITIES: WTI Futures Continue to Trade Within the November Range
WTI futures are trading in a range. A sell-off on Nov 12 strengthens a bearish theme. A continuation lower would pave the way for a move towards key support and the bear trigger at $55.99, the Oct 20 low. Clearance of this level would resume the downtrend. Note that it is still possible a bullish corrective cycle remains in play. Resistance to watch is $61.84, the Oct 24 high. Clearance of this hurdle would signal scope for a stronger correction. The downleg in Gold between Oct 20 and 28 appears to have been a correction and has allowed an overbought condition to unwind. Recent gains suggest that correction is over. With the metal retracing off last week’s high, the key support to watch lies at the 50-day EMA, at $3937.4. Clearance of this EMA would signal scope for a deeper retracement. The short-term bull trigger has been defined at $4245.23, the Nov 13 high.
- WTI Crude down $0.23 or -0.38% at $60.51
- Natural Gas up $0.03 or +0.78% at $4.405
- Gold spot up $46.31 or +1.14% at $4112.97
- Copper up $4 or +0.79% at $509.2
- Silver up $1.52 or +2.99% at $52.2174
- Platinum up $39.55 or +2.58% at $1572.27
EQUITIES: Scope Seen for an Extension of the Current E-Mini S&P Corrective Cycle
A M/T bull trend in Eurostoxx 50 futures remains intact, however, the latest sell-off highlights a stronger corrective cycle. The move down this week has resulted in the breach of two key support points; 5603.68, the 50-day EMA, and 5610.00, the base of a bull channel drawn from the Aug 1 low. The breach signals scope for a deeper pullback and opens 5503.00, a Fibonacci retracement. Initial firm resistance to watch is 5662.67, the 20-day EMA. S&P E-Minis maintain a softer short-term tone. The breach of support at 6655.70, the Nov 7 low cancels recent bullish signals and signals scope for an extension of the current corrective cycle. Note that price has also breached support at the 50-day EMA. An extension would open 6540.25, the Oct 10 low and the next key support. Initial firm resistance to watch is 6779.00, the 20-day EMA.
- Japan's NIKKEI closed lower by 165.28 pts or -0.34% at 48537.7 and the TOPIX ended 5.52 pts lower or -0.17% at 3245.58.
- Elsewhere, in China the SHANGHAI closed higher by 6.929 pts or +0.18% at 3946.742 and the HANG SENG ended 99.38 pts lower or -0.38% at 25830.65.
- Across Europe, Germany's DAX trades lower by 7.33 pts or -0.03% at 23172.48, FTSE 100 higher by 7.35 pts or +0.08% at 9559.97, CAC 40 down 23.76 pts or -0.3% at 7944.17 and Euro Stoxx 50 down 10.65 pts or -0.19% at 5524.06.
- Dow Jones mini up 53 pts or +0.11% at 46237, S&P 500 mini up 17.5 pts or +0.26% at 6657, NASDAQ mini up 75.5 pts or +0.31% at 24669.5.
GILT AUCTION RESULTS: 4.75% Oct-35 Gilt
| 4.75% Oct-35 Gilt | Previous | |
| ISIN | GB00BTXS1K06 | |
| Amount | GBP4.50bln | GBP4.50bln |
| Avg yield | 4.608% | 4.769% |
| Bid-to-cover | 2.84x | 2.78x |
| Tail | 0.6bp | 0.6bp |
| Avg price | 101.108 | 99.834 |
| Low price | 101.064 | 99.784 |
| Pre-auction mid | 101.087 | 99.803 |
| Previous date | 02-Oct-25 |
