Daily analysis 20 October

• Wall Street indices moved lower yesterday as the early-week rally was stopped. S&P 500 dropped 0.67%, Dow Jones moved 0.33% lower and Nasdaq traded 0.85% down. Russell 2000 dropped 1.72%
• US equity futures dipped further after the close of the Wall Street session, following mixed earnings release from Tesla. However, much of those losses has been recovered throughout the Asian session
• Tesla reported $21.45 billion in Q3 revenue (exp. $21.96 billion) and EPS of $1.05 (exp. $1.00). Musk said that demand for Q4 remains strong but transportation bottlenecks remain. Tesla shares dropped over 6% in the after-hours trading
• Indices from Asia-Pacific traded mostly lower today. Nikkei dropped 0.8%, S&P/ASX 200 moved 1.0% lower and Kospi declined 0.7%. Indices from China traded mixed
• DAX futures point to a flat opening of the European cash session today

• Fed’s Evans said that beginning the rate hike cycle half a year earlier would make sense. He also said that he still sees 4.5-4.75% range as appropriate for interest rates and that he does not believe US is entering wage-price spiral
• People’s Bank of China left 1-year lending rate unchanged at 3.65%, in-line with expectations
• Bloomberg reports that China is mulling reducing quarantine times for inbound travelers from 10 to 7 days, in a sign that country may be relaxing its strict zero-Covid policy
• Australian employment increased by 0.9k in September (exp. +25.0k) while unemployment rate remained unchanged at 3.5%
• Japanese exports increased 28.9% YoY in September (exp. 27.1% YoY) while imports were 45.9% YoY higher (exp. 45.0% YoY)
• Cryptocurrencies are pulling back with Bitcoin dropping 0.3% while Ethereum and Ripple trade 0.1% lower. Dogecoin bucks the trend and gains 0.7%
• Oil is trading around 1% higher while gold adds 0.2%
• GBP and EUR are the best performing major currencies while NZD, CHF and JPY lag the most

Oil caught a bid on news saying that China may relax Covid rules. Brent (OIL) broke above the resistance zone marked with 38.2% retracement of the upward move launch in late-September and is looking towards 200-hour moving average (purple line)