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Hong Kong-listed consumer stocks weakened, with Pop Mart (09992.HK) falling more than 5%, Gu Ming (01364.HK) falling more than 4%, and BRUCO (00325.HK), Laopu Gold (06181.HK), and Mixue Group (02097.HK) following suit.Futures data from October 21st revealed that as of October 20th, the mainstream benzene market in East China closed at 5,535 yuan/ton, down 220 yuan/ton from 5,755 yuan/ton at the beginning of October. Looking at the post-holiday market, major ports in East China maintained a steady pace of destocking in early October, but concerns about crude oil oversupply intensified, with Brent crude futures falling to a five-month low and weakening market sentiment. Coupled with a lack of downstream market support, exacerbating losses, and a lack of new orders from end users, secondary downstream inventories remained high and difficult to reduce, creating significant price transmission resistance. The market may face downward pressure in late October.Futures News, October 21st: Crude oil prices have recently continued to decline, with overall weakness predominating. Market concerns are mounting about a global oil glut. On the one hand, Saudi Arabia has been increasing crude oil production, albeit at a slower pace, but the cumulative increase has been significant. On the other hand, the US has entered its seasonal off-season, resulting in lower oil demand and significant pressure on oil inventory. Zhuochuang Information predicts that the decline in oil prices reflects the realization of some negative factors. The market is focused on the progress of Sino-US trade negotiations. Current market news suggests expectations for a deal are stronger than previously anticipated, potentially providing support for oil prices. Whether this can stabilize remains to be seen.The Hang Seng Tech Index continued its strong performance, rising over 3%. Tech stocks performed strongly, with Bilibili (09626.HK) rising nearly 10%. The Hang Seng Index is now up nearly 2%.On October 21, it was learned from the Ministry of Natural Resources that due to the influence of strong cold air and this years No. 24 typhoon "Fengshen" (strong tropical storm level), the National Marine Forecasting Center continued to issue an orange alert for waves and a yellow alert for storm surges at 08:00 on October 21 in accordance with the "Marine Disaster Emergency Plan".

Sellers in GBP/USD reached 1.0800 in anticipation of BOE speakers and US GDP

Alina Haynes

Sep 29, 2022 14:30

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Following a two-day recovery from the record low, the pound to dollar exchange rate has accepted offers to re-establish the intraday low near 1.0800. The cable pair is currently consolidating its highest daily gains since the middle of June during Thursday's Asian session.

 

GBP/USD values have taken a hit as of late due to a combination of factors, including a rise in US Treasury bond yields and skepticism about the Bank of England's (BOE) ability to strengthen the British pound. There may be parallels between China's current pessimism and Europe's persistent energy crisis.

 

Vehicle manufacturing in the United Kingdom rose for the fourth consecutive month in August, according to a data from the Society of Motor Manufacturers and Traders (SMMT) distributed by Reuters. However, statistics show that a majority of SMMT members are worried about the future of their company.

 

The People's Bank of China (PBOC) is yet another central bank that protects the local currency, in this case the yuan, alongside the Bank of Japan (BOJ) and the Bank of England (BOE). To protect the yuan from a possible economic downturn brought on by covid-led lockdowns, the PBOC has recently intervened in the market multiple times, and is likely to do so again today.

 

A difficulty for GBP/USD traders is the UK government's refusal to replace UK Chancellor Kwasi Kwarteng and its maintenance of his heavily criticized budget proposal.

 

To protect the value of the pound, the Bank of England (BOE) announced a bond-buying program on Wednesday (GBP). According to the provided information, the BOE will first purchase bonds with maturities of over 20 years and up to 5 billion pounds per auction. However, the BOE has said that it will begin purchasing on September 28, meaning that the predefined procedure for selling bonds has been postponed until October 31. Even though the Bank of England had planned to spend $5 billion on its emergency QE program, it later revealed that it had been able to spend only £1.02 billion.

 

The U.S. trade deficit with the rest of the world fell from $90.2 billion in July to $87.3 billion in August, a decline of $2.9 billion. The data shows that March marks the first monthly drop in exports since January, while March also marks the fifth consecutive month of falling imports. According to Reuters, Atlanta Fed president Raphael Bostic said on Wednesday that a rate hike of 75 basis points (bps) in November and a rate hike of 50 bps in December constitute the current baseline assumption. Charles Evans, president of the Federal Reserve Bank of Chicago, has emphasized the importance of addressing inflation and has tried to resume dollar purchases, but has been unable to do so because of falling yields.

 

The final readings of the US GDP for the second quarter, which are expected to confirm a -0.6% annualized figure, and several speakers from the BOE are forthcoming. To that end, if the US data provides strong results and BOE policymakers delay to convince investors, the GBP/USD could fall even more.


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