Russell Shor

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.

A bearish turn of the EMAs and stochastic (black ellipses) at this confluence may prove problematic. If the stochastic crosses and heads towards the 20 levels, the pressure will be building downwards. Moreover, if it reaches and maintains (red arrow), GBPUSD will be in danger of another leg down.

As the real risk-free yield increased, investors' required rate of return has followed suit. This mechanism has weighed heavily on the US30, as its present value adjusted downwards in response.

The bond market has capitulated as yields appreciated. As such, there may be interest in the bond market. If so, this may be the catalyst for the overbought normalisation.

The BoE hiked its official bank rate by 50bps to 2.25%. Three of the nine MPC members voted for 75bps, with one member preferring a 25bps move. Furthermore, the central bank expects an 11% inflation rate in October, reduced from 13%. However, the bank statement maintained, "should the outlook suggest more persistent inflationary pressures, including from stronger demand, the Committee will respond forcefully."

Japanese authorities have intervened and defended the yen, stopping a potential capitulation by USDJPY to 150. As a result, selling into the market began near the 145.75 level, pushing the price down to 140.64. This action comes after BoJ's Kuroda reiterated to continue monetary easing, initially sparking a selloff in the yen. Given this, it will be unsurprising if the Japanese Finance Ministry regularly influence price levels over the medium…

The currency pair weakened following an announcement by Russian President Putin of a partial mobilisation of troops, calling on 300,000 reservists. Recently, Russia has lost ground to the Ukrainian forces.