Daily Market Outlook, November 18, 2022 

Overnight

Asian markets are mostly mixed, with US equity futures also declining after some tough talk from US Fed speakers, specifically St Louis member Bullard who suggested that a 5% rate was a minimum terminal rate objective with the potential for a 7% rate being eyed by the committee. 

In the UK following Chancellor Hunt’s bleak warnings regarding the economic outlook, UK retail sales released this morning posted a modest 0.6% gain for October reversing the large declines of the prior two months of data, however, this is still 6.1% lower than this time last year. The pop in retail sales was accompanied by an improvement in the GFK consumer confidence reading which edged up this month although this is from record lows levels.

Day Ahead

In the UK focus will be on Bank of England's external member Jonathan Haskel who speaks at a conference later, the discussion is regarding fiscal policy, markets will pay attention to his comments in light of yesterday’s bleak UK budget update and how it may feed into his thoughts on the path of UK interest rates.

In the US markets will be watching October existing home sales for further signs of weakness driven by the increase in interest rates, data yesterday showed continued declines in housing construction to 4.2%

Overnight Headlines

  • Fed's Kashkari: Not Stopping Rate Hikes Until Inflation Peaks

  • Poll: Fed To Hike Rate By 50Bps, Peak Policy Rate Still Higher

  • White House's Adviser: Dedicated To Tech Antitrust Legislation

  • Mortgage Rates Reach Biggest Drop Since 1981, Fall To 6.61%

  • PBoC Adviser Says China Growth Target Should Be at Least 5%

  • Japan Inflation Hits 40-Year High, Weak Yen Fans Import Costs

  • BoJ Governor Kuroda Rules Out Hike Until Wages Rise Further

  • North Korea Fires Suspected ICBM After Warning On Exercises

  • UK Consumer Confidence Ticks Up In Sigh Of Relief After Truss

  • Italy PM Meloni Set To Present EUR30 Billion Budget To Cabinet

  • SNB's Maechler: Rates Will Hike If Inflation Still Above Estimates

Technical & Trade Views

SP500 Bias: Bullish Above Bearish Below 3900

Technicals

  • Primary support is 3900

  • Primary upside objective is 4120

  • Next pattern confirmation, acceptance above 4050

  • Failure below 3900 opens a test of 3840

  • 20 Day VWAP bullish, 5 Day VWAP bearish

EURUSD Bias: Bullish Above Bearish below 1.0250

Technicals

  • Primary support is 1.0250

  • Primary upside objective is 1.0620

  • Next pattern confirmation, acceptance above 1.05

  • Failure below 1.0230 opens a test of 1.0180

  • 20 Day VWAP bullish, 5 Day VWAP bullish

Today’s New York Cut Option Expiries: 1.0200-05 (839M), 1.0225 (687M), 1.0240-50 (597M) 1.0300-10 (1.19BLN), 1.0325 (678M), 1.0350 (206M) 1.0450 (2.7BLN), 1.0475 (268M), 1.0500 (566M)

GBPUSD Bias: Bullish Above Bearish below 1.1730

1.20 Target Achieved, New Pattern Emerging

Technicals

  • Primary support is 1.1730

  • Primary upside objective 1.2050

  • Next pattern confirmation, acceptance above 1.1970

  • Failure below 1.17 opens a test of 1.1640

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 1.1700 (560M), 1.1750-55 (257M)

USDJPY Bias: Bullish above Bearish Below 140

139.26 Target Achieved, New Pattern Emerging

Technicals

  • Primary resistance is 141.50

  • Primary downside objective is 136

  • Next pattern confirmation, acceptance below 138

  • Acceptance above 141.60 opens a test of 143.10

  • 20 Day VWAP bearish, 5 Day VWAP bearish

Today's New York Cut Option Expiries: 138.90-00 (660M), 139.45 (567M), 140.00-05 (413M) 140.50 (1.4BLN), 142.00 (590M)

AUDUSD Bias: Bullish Above Bearish below .6600

.6760 Target Achieved, New Pattern Emerging

Technicals

  • Primary support is .66

  • Primary upside objective is .6900

  • Next pattern confirmation, acceptance above .6775

  • Failure below .66 opens a test of .6550

  • 20 Day VWAP bullish, 5 Day VWAP bullish

  • Today’s New York Cut Option Expiries: 0.6650 (528M), 0.6660 (701M), 0.6750 (202M)

BTCUSD Bias: Intraday Bullish Above Bearish below 16800

Technicals

  • Intraday 157700 is primary support

  • Primary upside objective is 18325

  • Next pattern confirmation, acceptance above 17000

  • Failure below 15500 opens a test of 14400

  • 20 Day VWAP bearish, 5 Day VWAP bearish