European anxiety · British anxiety · Turkish anxiety, risk-off market enters ～ October 24 strategy ～
◎ Current positions and strategies
EUR/USD Short position is currently held. With the ECB Governing Council meeting tomorrow, I plan to refrain from adding new positions and wait. News such as the Italian budget proposal and the drop in the Turkish lira are increasing EUR-selling factors.
EUR/USD 4-hour chart
EUR/USD daily chart
AUD/USD Short position is currently held. It is testing lower levels but showing a firm move. On the 4-hour chart it appears to be forming a double bottom. I see many bearish factors for AUD, but if it cannot make new lows and rebounds, I will consider closing the position. I will keep the stop at "0.7180".
AUD/USD 4-hour chart
AUD/USD daily chart
As noted, political uncertainty in May’s administration has emerged. If a no-confidence vote is submitted, I am considering selling the pound.GBP/JPY at around 145 yen as a focal point. If it breaks, I am considering a Short position.
GBP/JPY 4-hour chart
GBP/JPY daily chart
◎ Today’s Highlights
1)Italian budget proposal
The Italian budget proposal was rejected by Europe as anticipated. It is the first time the EU has rejected a budget. Italy has stated that it has no substitute plan prepared for this budget. It is unclear who will concede—the EU or Italy—but due to the uncertain outlook, Italian bonds have been heavily sold. Italian concerns are spreading to Spain, Greece, and other parts of Europe. On the 26th, Moody’s is scheduled to review Italy’s rating. Pay attention to reports and statements regarding the budget.
Moody’s rating cut for Italy! – FX Guide: What are ratings?
2)UK politics and Brexit negotiations
At last week’s EU summit there was no progress in Brexit negotiations. Recently, Prime Minister May gave a speech in Parliament. With no progress, May is in a precarious position. There are reports that a no-confidence vote could be submitted as early as today. I will keep an eye on UK politics.
3)Canada policy rate
The Bank of Canada is expected to raise the policy rate by 0.25%. The rate hike is expected by more than 80%, but concerns come from recently released economic indicators, CPI and retail sales, which fell short of market expectations. A surprise hold could lead to a large drop in the Canadian dollar. This is noteworthy.
4)Turkey politics
Yesterday, President Erdogan gave a speech regarding the killing of a Saudi journalist. While concerns about Saudi Arabia are rising, yesterday’s Turkish lira sell-off also had another cause. It was reported that the ultra-right party MHP, which had formed an alliance with Erdogan, ended the alliance. Also, reports suggested Erdogan urged domestic banks to cut interest rates. Domestic turmoil in Turkey is increasing unease again.
◎ Today’s events schedule
Wednesday, 10/24
16:30 SEK
16:30 EUR Germany Manufacturing & Services PMI
17:00 EUR Eurozone Manufacturing & Services PMI
22:45 USD Markit Composite & Services PMI
23:00 CAD Canadian Policy Rate Announcement
23:30 USD Crude Oil Inventories
Thursday, 10/25
00:15 CAD
02:00 USD
02:10 USD
08:00 USD
↓↓↓ Weekly schedule is below ↓↓↓
◎ Archive
We are recording yesterday’s stock prices, long-term yields, and key speeches.
October 23 Archive – Rates, Stock Prices, and Key Speeches
