Bottoming process and earnings

Monica Kingsley Monicakingsley

Heavy selling gripped both main indices (and precious metals) Friday, in day two of bearish reactions to key earnings. We got the volatility spike. Is it sufficient, can VIX briefly at 24 only, be the top, or there‘s more to come, and VVIX with MOVE are right (bond market volatility did rise Friday, in a bull-flagging way.

That‘s the question I answer to clients as we‘re heading into midterms, with the added Iran war uncertainty right after that. Certainly the dynamic of relief over no hike (with almost certainty about Dec hike) in both indices and gold that got thoroughly checked next two days, is worth noting.

And aren‘t yields supposed to be rising if inflation is going up? How come then than 10y retreated from 5.30s% to current 5% only? Looking at all the unrest throughout Europe… is that part of the safe haven trade as more turmoil is ahead (for risk assets)?

These questions are also answered for clients – together with price impact expectations, which I tie into upcoming earnings as current week‘s ones were of utmost importance.

Author

Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

AUD/USD edges higher as hot CPI inflation and hawkish RBA lift rate hike bets

The AUD/USD pair gathers strength to near 0.7035 during the Asian trading hours on Friday. The Australian Dollar edges higher against the US Dollar as hotter Australian CPI inflation data has bolstered expectations of Reserve Bank of Australia rate hikes.

USD/JPY meets support near 157.00

USD/JPY retreats for the third consecutive day on Friday, revisiting the 157.00 region before attempting some recovery as investors continue to assess the latest BoJ meeting, where the central bank left rates unchanged, as widely anticipated.

Gold sinks to fresh yearly lows despite risk-off mood as Fed rate hike bets weigh

Gold slips to fresh year-to-date lows on Friday. The metal struggles despite a risk-off mood across markets, as expectations of further Federal Reserve (Fed) interest rate hikes continue to dominate price action, leaving Gold on track to end the month in negative territory.

Ripple Price Forecast: XRP bulls defend $1.20 as sell-side pressure triggers liquidations

Ripple (XRP) trades around $1.25 on Friday, rising from a short-term support level established at $1.20. This minor upward correction follows a sharp sell-off, triggered amid reports of a hack attack on the Binance exchange that impacted approximately $6.3 billion. The attack drove the broader crypto market on edge, as Binance suspended both deposits and withdrawals to contain the situation.

BoJ recap: A pause for now... but Japan has entered a new inflation phase

The Bank of Japan left its short-term policy rate unchanged at 1.25% but delivered a distinctly hawkish message on the risk of an inflation overshoot. The decision passed by 8-1, with board member Takata dissenting in favour of an increase to 1.5%, while Governor Kazuo Ueda stressed that the Bank would continue adjusting policy as needed.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.