Russell Shor

The GER30 daily threatens to fall back into its weak zone, between the lower blue and red bands (green vertical rectangle). Furthermore, the hourly chart shows bearishness with its EMAs and stochastic having crossed negatively (black ellipses). The S1 pivot is acting as short-term support. However, the stochastic is below 20 (blue arrow). The longer it holds this position, the greater the likelihood it fails.

In this week's podcast, FXCM Senior Market Specialists Russ and Nik discuss the fallout from the UK's mini-budget. The two specialists also talk about jobs data and how that impacts the Fed's monetary policy in its battle to tame inflation. In addition, the environment increases in complexity with the Q3 earnings season kicking off this week. Join our specialists as they discuss these and more.

Bollinger Bands suggest a volatility cycle that oscillates between band squeezes and expansions. For example, the previous four times, the Bollinger Width dropped below 0.1 (green dashed verticals), significant volatility increases followed, with the cryptocurrency declining meaningfully.

The BoE has announced an increase in its daily gilt purchases and will implement measures to ensure calm prevails as its emergency bond-buying programme winds up. The central bank intervened in the bond market after the government's mini-budget sparked a sell-off, threatening the UK's pension sector. The emergency intervention is due to end on Friday, 14 October.

The cc is a meaningful 87 on the daily chart. As such, if the real rate has charted a higher trough, we would expect dollar strength to follows. As such, we are monitoring the green sideways arrow - if the price closes above, the greenback may also have charted its higher trough. This will be bullish, creating a potential foundation for USDOLLAR's next impulse move up.

Interestingly, the recent drop in the greenback (blue vertical) has benefitted the NAS100 more than the cryptocurrency. Given BTCUSD's recent resiliency, we would have expected it to have had a more robust response to the dollar's movement. Instead, the NAS100 has risen by 5.6% compared with Bitcoin's 4.6%, showing its relative strength.

The real rate uptrend remains valid, and the upward green trendline defines its momentum. In this vein, a pullback to test this momentum will be compelling, given the Fed's current aggressive monetary policy. As such, and until proven otherwise, a dip in the yield uptrend remains our preferred scenario.

Last week's minibudget caused vast amounts of volatility in the Gilt market, with GBPUSD reacting. Finally, the BoE stepped in to calm markets. Since then, UK Chancellor Kwasi Kwarteng has backtracked on 45% tax rate cut. The core PCE in the US surprised to the upside at 4.9%, suggesting sticky inflation. This Friday, we will see the NFP numbers, with forecasts ranging between 250-265k, suggesting moderation in job numbers.

The bank had endured several knocks, including losing $5.1bn when Archegos Capital Management collapsed. It may need to raise capital but hasn't announced new fundraising endeavours yet. However, selling new shares will dilute the value of existing shares, and increasing debt will hurt its balance sheet further

Core PCE, the Fed's preferred inflation measure, exceeded the 4.7% YoY forecast, printing at 4.9%. However, on a month-on-month basis, it was 0.6% against the 0.5% expected. Food and energy prices are excluded from the core number, implying that aggregate demand hasn't adjusted as expected for the Fed's current hiking cycle.