Financial markets globally are on the rise once again today despite the United States CPI inflation report coming in stronger than expected on Thursday.
So far, we are seeing big moves in the foreign exchange market, European, Asian, and United States stock markets. The precious metals market is strangely muted.
No reason has been given why the move is happening. It could be due to the mid-terms. Trading could be taking profits ahead of the results of the mid-term elections.
Big moves are being seeing in the United States stock markets, with futures for the DJIA, Nasdaq, and S&P500 in the green. Especially the DJIA, as it trades up by nearly 2 percent already.
Huge moves are also happening in the foreign exchange, with the British pound leading the way. The GBPUSD pair has recovered by nearly 300 points already since the lows of the weeks as sterling knocks on the door of 1.1300.
UK Chancellor Kwarteng departed early from Washington meetings to return to the UK. Its widely expected he’ll be reversing his disastrous tax cut policy that led to the melt-down in gilts and GBP and the subsequent rescue by the Bank of England.
This is the primary reason why sterling is rallying. A full reversal of the budget would be seen as a huge positive for the British economy and currency.
The USDJPY pair has started to back away from the yearly highs due to the reversal in the buck. We had also commented from Japan’s finance minister Suzuki. These are pretty weak intervention remarks.
The data focus was on inflation results from today China. The CPI for September rose to its highest since April of 2020. The Chinese Government also decided to buy property today amidst the national housing crisis.
People’s Bank of China Governor Yi Gang spoke during the session, saying there is more policy support from the Bank ahead.
The Chinese President Xi Jinping is poised to win a third term at the event. The seven members of the next Politburo Standing Committee will also be named.
