Morning Market Review

EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0000. Market activity at the beginning of the week remains low, as market participants await the publication of the minutes of the US Federal Reserve meeting, which begins tomorrow. Current forecasts suggest an interest rate hike of at least 75 basis points. About 16% of analysts expect that the value will be corrected by 100 basis points at once, citing last week's macroeconomic statistics on inflation, which slowed down from 8.5% to 8.3% in August, which turned out to be worse than the expected decline to 8.1%. In turn, data released in the eurozone showed that consumer price growth accelerated to a new record high of 9.1%, although fuel prices have been declining recently. The European Central Bank (ECB) is also hastily raising interest rates, which, however, so far only affects the risks of a recession in the region.

GBPUSD
The British pound is trading with multidirectional dynamics, testing the level of 1.1400 for a breakdown. At the end of last week, the GBP/USD pair renewed record lows of 1985, retreating after the publication of unsuccessful macroeconomic statistics from the UK, as well as under pressure from the US dollar, the demand for which remains stable. Friday's data showed a sharp drop in Retail Sales of 1.6% after increasing by 0.4% a month earlier, while analysts had expected only -0.5%. In annual terms, the decline in the indicator accelerated from -3.2% to -5.4%, which also turned out to be worse than the -4.2% expected by analysts. On Thursday, investors will focus on the results of the Bank of England meeting. Forecasts suggest another increase in interest rates by 50 basis points to 2.25%. Earlier, representatives of the regulator made it clear that they would continue to tighten monetary policy until the inflation dynamics stabilized. At the same time, the Bank of England expects that the economy will go into recession in the fourth quarter.

XAUUSD
Quotes of the XAUUSD pair start the week with a moderate decline, returning to the "bearish" dynamics after a weak attempt at corrective growth at the end of last week, again testing 1665 for a breakdown and remaining under pressure from the prospects for further growth in interest rates by the world's leading financial regulators. This week, meetings will be held at the Bank of Japan, the Bank of England, and the US Federal Reserve. If the Japanese regulator still does not dare to raise the interest rate, the British and the American ones are steadily following the course of tightening monetary policy, discussing only the rate of increase in value. Current forecasts suggest that the US Federal Reserve will adjust the interest rate by 75 basis points, while the Bank of England will stop at 50 basis points, expecting a recession in the British economy in the fourth quarter, which, according to experts, can be overcome no earlier than 2024. Demand for "safe" gold is receiving little support from the worsening energy crisis in Europe, but the downward trend continues.

Morning Market Review

EURUSD
The European currency shows mixed trading dynamics, consolidating near 0.9950. Investors are in no hurry to open new trading positions, preferring to wait for the publication of the US Federal Reserve decision on interest rates. However, the euro still traded mainly with a downtrend, which again led to the consolidation of the instrument below the psychological level of 1.0000. Some pressure on the EUR/USD pair was exerted by the deteriorating prospects for the region's economy, in connection with which the authorities are taking decisive action to curb inflation. In particular, the President of the European Central Bank (ECB), Christine Lagarde, spoke the day before, saying that in order to curb a sharp rise in prices, it may be necessary to raise interest rates to levels that will limit economic growth altogether. The current inflation rate in the eurozone is above 9.0% and is unlikely to fall anytime soon. Macroeconomic data released yesterday in Germany pointed to a sharp rise in producer prices. In August, the Producer Price Index rose by 7.9% after rising by 5.3% a month earlier, while analysts expected a slowdown to 1.5%, and in annual terms, the index accelerated from 37.2% to 45.8%, which also turned out to be higher than the estimated 37.5%.

GBPUSD
The British pound is trading with a weak downtrend, testing the level of 1.1370 for a breakdown. The GBP/USD pair is holding just one step away from its record lows, reacting to the prospect of further economic slowdown amid continued high inflation. However, traders prefer to stay out of the market until new drivers are released. Today, the US Federal Reserve will announce its decision on interest rates. It is expected that the US regulator will go for another increase in the value of 75 basis points, bringing it to 3.25%. At the same time, agency officials may signal the continuation of the current course of tightening monetary policy for the near future, given that the pace of slowdown in consumer prices is clearly insufficient. Tomorrow there will be meetings of the Bank of Japan, the Bank of England and the National Bank of Switzerland. The British regulator is also expected to take steps aimed at tightening monetary policy; in addition, officials have repeatedly announced significant risks of a recession in the national economy already in the fourth quarter. Current forecasts suggest that the Bank of England will raise the rate by 50 basis points to 2.25%.

XAUUSD
Gold prices show a slight decline, developing a weak downward momentum formed the day before. The XAU/USD pair is testing 1660.00 for a breakdown, waiting for the publication of new drivers on the market. The focus of investors' attention on Wednesday is the publication of the decision of the US Federal Reserve on interest rates. Investors have already included a 75 basis point increase in current quotes, but it is possible that the regulator will adjust the cost of borrowing immediately by 1.0%. Either way, gold remains under pressure as global central banks hike interest rates. This week, similar steps are also expected from the Bank of England and the National Bank of Switzerland, and the day before the Bank of Sweden raised the value immediately by 100 basis points. In turn, the growing geopolitical risks, as well as the threat of a recession in the global economy, provide moderate support to the precious metal.

Morning Market Review

EURUSD
The European currency shows mixed dynamics, consolidating near 0.9830 and new record lows at 0.9800. The euro fell after the publication of the decision of the US Federal Reserve to raise interest rates by 75 basis points to 3.25%. At the same time, the regulator signaled further plans: it is reported that by the end of the year the rate can be adjusted to 4.40%, after which in 2023 an increase to 4.60% is possible. The Fed also released forecasts for economic growth. It is assumed that in 2022 the Gross Domestic Product (GDP) will rise by only 0.2%, and in 2023 it may grow by 1.2%. The euro remains under pressure from the development of the energy crisis, despite a slight correction in energy prices. Meanwhile, the European Commission has decided to ease sanctions against Russian coal, as this type of fossil fuel is increasingly used in the countries of the region as an additional source of heat and electricity.

GBPUSD
The British pound is trading down, testing new record lows around 1.1230. The GBP/USD pair reacted with a decrease to the publication of the decision of the US Federal Reserve to raise interest rates by 75 basis points. Moderate pressure on the instrument can be traced today; however, activity in the market is gradually decreasing, as investors await the publication of the results of the Bank of England meeting, at which the interest rate can be adjusted by 50 basis points to 2.25%. In addition, the British regulator will publish forecasts for a possible recession in the economy in the fourth quarter. Meanwhile, the new British Prime Minister Liz Truss announced the introduction of incentives for industrial enterprises, which, among other things, involve reducing the price of electricity and gas by half of the current cost for the next six months. Experts have calculated that such support measures will cost the British government about 40.0 billion pounds.

NZDUSD
The New Zealand dollar shows a moderate decline, developing a steady "bearish" trend from September 13. The NZD/USD pair is testing 0.5820 for a breakdown, updating the record lows of March 2020. The impetus for the current decline in the instrument is the fact that the US currency has strengthened after the publication of the decision of the US Federal Reserve to raise interest rates by 75 basis points, the highest level since 2008. Until March 2022, the indicator had been in the range of 0.00-0.25% for two years, after which the regulator began to tighten monetary policy as part of the fight against record inflation, which reached 40-year peaks. It is also worth noting that the Fed stepped up its "hawkish" rhetoric and is planning at least one more major value adjustment before the end of the year. At the same time, the regulator hopes to avoid a recession in the national economy. The macroeconomic statistics from New Zealand released today do not provide any noticeable support to the instrument. Westpac Consumer Survey in the third quarter showed active growth from 78.7 points to 87.6 points, which fully coincided with market expectations. Export volumes slowed in August from 6.35 billion dollars to 5.48 billion dollars, while Imports rose slightly from 7.76 billion dollars to 7.93 billion, which led to an increase in the Trade Deficit from 11.97 billion dollars to 12.28 billion dollars.

USDJPY
The US dollar shows active growth, testing the strong resistance level of 145.00. The pressure on the yen is exerted by the decision of the Bank of Japan to keep the key interest rate unchanged at -0.1%, which was quite expected, since the regulator has repeatedly stated that the time for tightening monetary policy has not yet come. At the same time, the officials express concern about the unilateral depreciation of the yen, which increases the risks of direct foreign exchange interventions. The decision of the Bank of Japan contrasts with the minutes of the meeting of the US Federal Reserve, published the day before, which increased the interest rate by 75 basis points to 3.25%, and also pointed to further tightening of monetary policy until the end of the year.

XAUUSD
Gold prices have returned to a downtrend, returning to the previous record lows of 2020 near 1650.00. The pressure on the position of the instrument is exerted by the decision of the US Federal Reserve published the day before to increase the interest rate by another 75 basis points for the third time in a row. At the same time, the regulator raised inflation estimates and lowered economic growth expectations for 2022–2023. The Chair of the Fed, Jerome Powell, signaled a further tightening of monetary policy until the end of the year: in particular, it is assumed that at the next meeting the regulator can adjust the value immediately by 125 basis points. Today, investors are following the results of the meetings of the National Bank of Switzerland, which raised the interest rate from -0.25% to 0.5%, and the Bank of England, which may adjust the value from 1.75% to 2.25% (the decision will be published on 13:00 (GMT+2)). Also, the British regulator is expected to publish updated forecasts for economic growth, suggesting evidence of a possible recession in expert estimates.

Morning Market Review

EURUSD
The European currency shows a downtrend, renewing new record lows and dropping below 0.9550, after which the EUR/USD pair still showed an uncertain corrective rebound. The instrument was falling against the US dollar at a moderate pace throughout the past week, and the culmination of the "bearish" dynamics fell on Friday, when disappointing statistics came to the market. S&P Global Manufacturing PMI in Germany fell from 49.1 points to 48.3 points in September, the Services PMI decreased from 47.7 points to 45.4 points, and the Composite PMI decreased from 46.9 points to 45.9 points against the expected 46.0 points. In turn, in the euro area, the Manufacturing PMI fell from 48.9 points to 48.2 points, and the Services PMI declined from 49.8 points to 48.9 points. The focus of investors today will be the speeches of representatives of the European Central Bank (ECB), among which are Luis de Guindos, Fabio Panetta, and the President of the regulator Christine Lagarde.

GBPUSD
The British pound is trading with a strong downward momentum, approaching the parity level and updating record lows. GBP/USD is at 1.0500, retreating slightly from its record lows at 1.0270. The pressure on the British currency is exerted by the actively growing dollar, the demand for which is supported by the growth of alarming sentiment in the market. In particular, last Friday, investors paid attention to the statistics on business activity in Europe and the US, which increased the likelihood that the economy will enter a recession in the near future. The UK Services PMI from S&P Global in September declined from 50.9 points to 49.2 points, dropping below the level of 50.0 points, which separates growth from recession. The S&P Global/CIPS Composite PMI for the same period fell from 49.6 points to 48.4 points, while the forecast suggested a decrease to only 49.0 points. In addition, the Consumer Confidence index from Gfk Group in September fell from -44.0 points to -49.0 points, while the forecast for a correction to -42.0 points.

XAUUSD
Gold prices show mixed dynamics, holding near 1640.00 and updating April 2020 record lows. The pressure on the position of the instrument is exerted by the growing dollar, which is supported by the deterioration of global economic forecasts. In addition, the meetings of world central banks last week, which resulted in the widespread tightening of monetary policy, had a noticeable pressure on gold. Only the Bank of Japan remained on the sidelines, announcing foreign exchange intervention. The US Federal Reserve raised rates by 75 basis points and is likely to adjust the value at least once before the end of 2022. It is noted that under certain conditions, the regulator may decide to raise the rate immediately by 1.25%.

Morning Market Review

EURUSD
The European currency shows a weak corrective growth after a sharp decline in the last five trading sessions. The day before, the EUR/USD pair also traded mainly with downward dynamics and managed to update record lows, approaching the level of 0.9550. Investors are alarmed by the current market developments, which clearly indicate a sharp slowdown in the eurozone economy. Together with similar processes in China and the US, this could lead to a slowdown in the entire global economy. World central banks are actively tightening monetary policy in an attempt to reduce inflation. In particular, another major increase in interest rates from the US Federal Reserve is expected before the end of the year, and the Bank of England, for example, may carry out an unplanned correction of the rate against the backdrop of a record collapse in the national currency. The macroeconomic statistics released yesterday in Germany put additional pressure on the euro positions. IFO Business Climate indicator fell from 88.5 points to 84.3 points, while the forecast was at 87.1 points. In turn, the Current Assessment indicator corrected in September from 97.5 points to 94.5 points, which turned out to be worse than the expected reduction to 96.0 points, and the Economic Expectations index fell from 80.5 points to 75.2 points, although analysts were counting on 78.6 points.

GBPUSD
The British pound is in an upward correction, recovering from a sharp collapse the day before, which led to new record lows. The GBP/USD pair is testing 1.0770 for a breakout, although yesterday the quotes fell below 1.0280. Investors are concerned about the plans of the UK government to carry out a series of active reforms aimed at supporting the country's economy. In particular, earlier the UK Chancellor of the Exchequer, Kwasi Kwarteng, presented in Parliament a support plan worth 60.0 billion pounds, which, among other things, provides for the abolition of the increase in income tax for large enterprises from 19% to 25%. It is also reported that the maximum income tax rate in the country will be abolished. Earlier, the new British Prime Minister Liz Truss also presented her proposals to support the economy, advocating subsidizing electricity and heating bills for businesses and households for the next six months.

AUDUSD
The Australian dollar shows a subdued increase, recovering from a sharp decline over the past two trading days. The AUD/USD pair is preparing to test 0.6500 for a breakout, having won back about half of the losses at the beginning of the current week. At the same time, the demand for the US dollar remains high, as the risks of a slowdown in the global economy increase. Statistics on business activity in the EU and the UK greatly disappointed investors, and the pound dives to record lows on the back of news about measures to support the economy from the new government. In turn, it is worth noting that the statistics on business activity in Australia released last week turned out to be quite positive and managed to support the cautious optimism of Australian dollar buyers. S&P Global Manufacturing PMI rose from 53.8 to 53.9 in September, while Commonwealth Bank's Services PMI rose from 50.2 points to 50.4 points, while forecasts suggested a decrease to 47.7 points.

USDJPY
The US dollar is trading with multidirectional dynamics, consolidating near the level of 144.50. Corrective sentiment prevails in the market after the increase of the US currency in the last two trading days. Meanwhile, moderate support for the yen at the beginning of the week is provided by relatively optimistic macroeconomic data from Japan. Jibun Bank Services PMI in September rose from 49.5 points to 51.9 points, while forecasts suggested a decline to 49.3 points. In turn, Jibun Bank Manufacturing PMI fell from 51.5 points to 51.0 points, but still remains above the 50.0 point level, which separates growth from decline. Investors are focused on macroeconomic statistics from the US today. It is expected that the dynamics of Durable Goods Orders in August will decrease by 1.1% after a decrease of 0.1%, and the indicator, excluding Defense orders and Transportation, will show near-zero dynamics. In turn, noteworthy data from Japan will appear on Wednesday, when the minutes of the meeting of the Bank of Japan will be published.

XAUUSD
Gold prices show a slight increase, retreating from their April 2020 record lows, updated the day before, and trying to consolidate above 1630.00 amid increasing uncertainty about the global economic outlook. The pressure on the XAU/USD pair remains, as the market expects further tightening of monetary policy by global financial regulators. In particular, the US Federal Reserve may go for at least one more major interest rate hike before the end of the year. In turn, the Bank of England may hold an emergency meeting in order to correct the rate, although it was previously noted that the regulator plans to take a wait-and-see position until November. In turn, the demand for gold is supported by the prospects for an escalation of the military conflict between Ukraine and Russia, which could lead to increased anti-Russian sanctions.

Morning Market Review

EURUSD
During the Asian session, the European currency is slightly reduced against the US dollar, renewing new record lows and testing the level of 0.9550 for a breakdown. Pressure on the positions of the trading instrument is exerted by weak macroeconomic statistics released in Germany at the beginning of the week. The Business Climate Index from the Institute for Economic Research (IFO) in September showed a decrease from 88.6 points to 84.3 points with a forecast of 87.1 points, while the Current Assessment indicator for the same period sharply corrected from 97.5 points to 94.5 points, while analysts expected a decline to only 96.0 points. The index of Economic Expectations fell from 80.5 points to 75.2 points, contrary to experts' forecasts of a more significant downward trend of 78.6 points. In addition, the demand for risky assets on the market is noticeably declining against the background of the escalation of the military conflict in Ukraine, as traders are waiting for a decision from the political leadership of Russia on the results of referendums held in parts of the occupied territories. In turn, some support for the quotes of the single currency was provided by the rhetoric of the President of the European Central Bank (ECB) Christine Lagarde, who noted the readiness of the regulator to continue raising the interest rate, despite the increased risks of a recession in the economy of the region. At the same time, the official acknowledged that the return of inflation to target levels may require more time than originally predicted.

GBPUSD
The pound continues the downward dynamics of trading during the morning session on September 28, resuming the decline after an uncertain attempt to correct the day before. At the moment, the GBP/USD pair is testing 1.0650 for a breakdown, waiting for new drivers to move. On Monday the markets were actively selling the British currency against the background of the announced measures of fiscal easing, which will create a significant burden on the budget of the United Kingdom. On September 22, the Bank of England predicted that after the decline in Gross Domestic Product (GDP) for two quarters in a row, the national economy had already entered a technical recession; however, officials adjusted the interest rate to the maximum since 2008 on expectations that inflation could peak just below 11.0% in October. The Treasury, together with the Bank of England, intends to develop a strategy to control the growing debt of the UK against the backdrop of a program previously announced by the country's new Prime Minister, Liz Truss, to subsidize electricity and heating bills for businesses and households for at least six months. Meanwhile, the British Retail Consortium (BRC) Retail Price Index released today rose 5.7% year-on-year in August after rising 5.1% in the previous month. At the end of the week, an updated estimate of the country's GDP dynamics for the second quarter will be presented.

XAUUSD
Gold prices are correcting, returning to the "bearish" trend after a slight increase the day before and testing the level of 1625.00. Quotes again closely approached the record lows of April 2020, updated at the beginning of the week, remaining under pressure from the rising dollar, as well as expectations of further interest rate hikes by the world's leading central banks. In particular, before the end of the year, another major increase in the indicator is expected from the US Federal Reserve, and analysts do not exclude that the regulator may decide to adjust immediately by 1.25%. Most likely, the European Central Bank (ECB), the Bank of England and others will also continue to tighten monetary policy. In turn, gold is moderately supported by the growing geopolitical tensions in Eastern Europe. At the moment, the markets are awaiting decisions from the Russian leadership in connection with the referendums held in the occupied territories.

EURUSD
The European currency is falling, retreating after an active corrective growth the day before, when quotes retreated from record lows. The reason for the strengthening of the downtrend was mainly technical factors, as well as the prospect of foreign exchange interventions by regulators. In turn, the news background remained quite pessimistic, which did not allow the "bulls" to develop an uptrend. In particular, Gfk Group's Consumer Confidence Index, published yesterday in Germany, corrected from -36.8 points to -42.5 points in October, while analysts had expected a drop to only -39.0 points. In addition, the index of Economic Expectations in Switzerland in September from the Center for European Economic Research (ZEW) fell from -56.3 points to -69.2 points against the forecast of -48.5 points. The focus of investors today will be a block of data on the level of Consumer Confidence and Economic Sentiment in the euro area for September. Also during the day statistics on the dynamics of inflation in Germany is expected to be released: the figure may accelerate sharply from 7.9% to 9.4% in September.

GBPUSD
The British pound is trading with downward dynamics, retreating from local highs, updated the day before. The GBP/USD pair is testing 1.0800 for a breakdown, once again being under pressure from a weak macroeconomic background. The reason for the emergence of upward dynamics was the Bank of England's statements about the possible conduct of foreign exchange interventions. The regulator said that it will buy an additional part of long-term British bonds, and also take a break in new gold purchases. The market reacted to these statements ambiguously: skeptics reminded that the recent intervention by the Bank of Japan did not lead to any visible results, as the yen showed only a short-term increase, after which it quickly returned to its previous record lows. One way or another, the Bank of England is seriously concerned about the government's decision to carry out a number of reforms, including those to reduce the fiscal burden. All this creates significant pressure on the UK public debt, which, in turn, affects the stability of the economy as a whole. At the end of the week, investors expect the publication of updated data on the dynamics of the UK's Gross Domestic Product (GDP) for the second quarter.

XAUUSD
Gold prices are declining, correcting after an attempt to grow the day before, when many currencies, as well as precious metals paired with the US dollar, showed an active positive trend, based on a number of technical factors. The XAU/USD pair is supported by the deteriorating global economic outlook, but the threat of further interest rate hikes by the world's leading financial regulators is holding back the "bulls" undertakings. In addition, investors fear the possibility of a number of foreign exchange interventions. In particular, the Bank of Japan has already carried out such an operation, and the day before, the Bank of England also quite unexpectedly spoke in favor of this decision. In addition, a significant pressure on the position of the instrument is exerted by the fact of the growth in the yield of US government bonds: 10-year Treasury securities rose to 3.984%. At the same time, investors recorded a short-term increase to 4.000%, which happened for the first time since October 2008.

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