Markets Report - 22 November 2022

A daily breakdown of the markets for the 22nd November 2022, provided to you by Sterlex.

🇪🇺💶EUR/USD picks up pace after hitting fresh multi-day lows near 1.0220 at the beginning of the week, always on the back of some corrective move in the greenback and a better mood surrounding the risk complex. On the other hand, ECB Governing Council member Robert Holzmann noted that he would support a 75 bps rate increase at the next meeting in case the situation remains the same. ECB policymaker Mario Centeno said late Monday that there were many conditions for the next rate hike to be less than 75 basis points (bps). Back to the euro area, the increasing speculation of a potential recession in the region - which looks propped up by dwindling sentiment gauges as well as an incipient slowdown in some fundamentals – emerges as an important domestic headwind facing the euro in the short-term horizon.

🇬🇧💷The GBP/USD pair struggles to capitalize on its modest intraday gains and retreats a few pips from the daily high, though lacks follow-through. It is worth mentioning that the UK Office for Budget Responsibility (OBR) now projects the UK GDP to slump by 1.4% next year as compared to a growth of 1.8% forecast in March. The pair is currently placed just below the mid-1.1800s, up around 0.20% for the day, and remains at the mercy of the US Dollar price dynamics. There isn't any major market-moving economic data due for release from the UK on. Furthermore, the worsening COVID-19 situation in China, along with geopolitical risks, should lend support to the buck and contribute to keeping a lid on the major, at least for now. A bleak outlook for the UK economy might continue to undermine the British Pound and cap gains for the GBP/USD pair. Tuesday, leaving the GBP/USD pair at the mercy of the USD price dynamics.

🇺🇸 🏦In the US data space, the only scheduled release will be the Richmond Fed Manufacturing Index seconded by speeches by Cleveland Fed L Mester (voter, hawk), Kansas City Fed E George (voter, hawk) and St. The ongoing knee-jerk in the dollar comes amidst a small correction in US yields following the recent marked rebound, while renewed appetite for the riskier assets also puts the buck under scrutiny. Louis Fed J Bullard (voter, hawk). The index comes under pressure after three daily advances in a row sustained by hawkish remarks from Fed speakers, which somewhat alleviate the speculation around a potential pivot in the Fed’s policy. The dollar faltered just ahead of the 108.00 barrier at the beginning of the week, sparking a corrective move soon afterwards pari passu with the recovery in the risk-linked galaxy.