Open: London Session | Forex, Metals, Oil, Agriculture October 27, 2022



This environment isn t exactly one where tech stocks can thrive given high interest rates, a strong dollar and high inflation. Microsoft Corp. reported its poorest quarterly sales growth in five years as the strengthening dollar ate into its profits outside the US. Euro s drop risks inflation via imports. One-week risk-reversals for the euro — a gauge of its expected direction over that time frame — are still in negative territory.


The shift in US thinking comes after officials spent months pressuring the bloc to amend its sanctions on Russian oil and is likely to add to EU frustrations. ECB decision day, Russian oil price cap review and a radical overhaul at Credit Suisse.

United States

So, this was a definite downshift in pace that will make it easier for the Fed to pave the way next week for a deceleration. There was at least one data point within the US that added to the chance of a change in monetary policy. The US and EU are likely to settle for a loosely policed cap at a higher price than the stricter system once envisioned. That is strongly hinted at it in this article for the ever-influential Wall Street Journal, which cites recent speeches by Fed governors.
A deceleration by the Fed might well happen in December. This is true globally as well as in the US. Bill Dudley (former head of the New York Fed): The UK s Bond-Market Mess Won t Happen in the US Conor Sen: Fed Pullback?


Coming Up European shares are poised to decline as investors assess corporate report cards ahead of the ECB’s policy decision. Calls are mounting ahead of the decision for the ECB to take action on a collateral scarcity that is warping the market. Among the concerns by the EU s markets regulator: the lack of clarity in regulations when it comes to basic ESG concepts such as a sustainable investment. The central bank is projected to hike by 75 basis points, with Christine Lagarde unlikely to be specific about the start date for QT.
Instant Pay | The EU is seeking to jumpstart the rollout of instant payments, where it significantly lags behind countries in Asia and Latin America.