1 Minute Market Rundown – 15th November 2022

USD Continues to Drop
PPI Next Up to Confirm Inflation Peak?
Crypto Unable to Join the Risk Party

The sell off in the USD that started last week has shown no sign of abating so far as models and momentum accounts chase the move higher. The main movers remain the Euro and the Yen with the former vaulting 1.0400 this morning and the latter sitting below 140 which was unthinkable a week ago. The move is tough to fight but caution has to be urged at these levels. The 200 day moving average lies at 1.0430 and daily RSI indicators are entering overbought territory. A 7 percent move on the CPI number is outsized by anyone’s metrics so the US PPI today takes on additional significance. The expectation will be this number confirms the CPI move. It needs to, or beware the turn. A close above 1.0450 and the downtrend is firmly a thing of the past and dips are to be bought.

Elsewhere stocks remained firm without making much fresh headway yesterday. It seems institutional and retail money is awaiting a little more confirmation before chasing what could be another bear trend rally. This makes sense to me, and today’s number could be the confirmation it needs. It is worth noting that FED officials have welcomed the inflation drop but have hardly been falling over themselves to reassure the market that the job is done.

Crypto remains shrouded in the FTX spillover concerns and understandably so. Its inability to gain any sort of meaningful bounce on the back of the risk rally elsewhere leads me to continue to focus on the downside whilst below 18,000 and 1400 in BTC and ETH. Should we get a turn in the macro picture this could get ugly quickly. Conversely should those levels be regained and the bad news fade into a distant nightmare, the market could find itself badly underweight in this space into the year end. Hope for the best but prepare for the worst…

Good luck as always!

Richard Usher – Head of OTC Trading

Richard Usher

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