Daily Market Outlook, September 22, 2023

Daily Market Outlook, September 22, 2023Munnelly’s Market Commentary… Asian equity markets showed a mixed performance overnight. The Bank of Japan (BoJ) made no changes to its monetary policy in its latest update. BoJ Governor Ueda's post-announcement comments did not signal an imminent rise in interest rates. Before the meeting, Japan's finance minister had issued a warning that action would be taken if the yen continued to weaken. Japanese annual CPI inflation fell slightly to 3.2% in August, down from 3.3% in July, while 'core' inflation remained unchanged.In the UK, retail sales data for August indicated a 0.4% increase, following a 1.2% decline in July. This figure was in line with expectations and is unlikely to significantly alter perceptions of economic conditions. Additionally, the GfK consumer confidence indicator for September unexpectedly saw a sharp rise to -21, up from -25 in August. This marks its highest level since January 2022, with consumers showing increased optimism about their personal finances and the overall economic situation.Today brings the release of the September purchasing managers' indices (PMIs) for the UK, Eurozone, and the US. In the UK, both the manufacturing and services PMI indices fell in the previous month. The decline in the services sector was notably significant, pushing the composite index below 50, indicating a contraction in activity for the first time since January. If this month's readings also show weakness, it may further heighten concerns about downside risks to economic growth and potentially reinforce the belief that interest rates have peaked. Notably, Bank of England policymakers had access to this data before deciding to keep rates unchanged yesterday. The September CBI industrial survey will also be published this morning.In the Eurozone, both PMI indices declined in August, with the composite indicator remaining below 50 for a third consecutive month. These developments added to concerns about declining activity in the region and may have contributed to the European Central Bank's suggestion that interest rates have peaked. While there may be a modest rebound in the manufacturing sector this month, it is expected that services will continue to slide, keeping the composite indicator below the 50 threshold.Stateside, PMI readings have garnered more attention recently, possibly due to the uncertain economic environment. Moderate increases in both readings are anticipated for September. Several Federal Reserve policymakers are scheduled to speak, and the market will be closely monitoring their remarks for further insights into the likelihood of another interest rate hike before the end of the year.FX Positioning & Sentiment Traders are increasing their bearish bets against most Asian currencies, with the Chinese yuan remaining the most shorted currency. Short bets on the Thai baht are near a three-month high, and the Indian rupee (INR) is witnessing its largest short position since November 2022. Additionally, there is a substantial bet against the Indonesian rupiah (IDR), the largest in over nine months. These developments come as the yuan's recovery reached a significant point last week, impacting traders' sentiment and positions in the region's currencies.CFTC Data As Of 15-09-23EUR net spec long drops to 113,080 contracts from 136,231JPY short rises to 98,713 from 97,136AUD short lower at 79,533 from 83,537GBP long slightly smaller at 46,174 from 46,384 (Source: Reuters)FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)EUR/USD: 1.0600 (800M), 1.0650-60 (819M), 1.0700 (1BLN), 1.0730 (921M)1.0750 (1.5BLN). USD/CHF: 0.8875 (443M), 0.8925 (324M)GBP/USD: 1.2225 (370M), 1.2250 (1.1BLN),1.2285 (405M), 1.2300 (781M)1.2325 (545M), 1.2350 (511M), 1.2375 (545M)EUR/GBP: 0.8650 (406M), 0.8840 (611M)AUD/USD: 0.6400 (277M), 0.6500 (446M), 0.6520 (230M), 0.6580 (341M)USD/CAD: 1.3385 (916M), 1.3400 (727M), 1.3450 (584M), 1.3465 (320M)USD/JPY: 147.00 (676M), 147.50 (627M), 148.00 (472M), 149.00 (515M)Overnight Newswire Updates of NoteBoJ Keeps Ultra-Loose Policy, Dovish Guidance On OutlookJapan's Factory Activity Shrinks, Service Sector Growth Slows In SeptJapan’s Suzuki: Closely Watching FX Moves With High Sense Of UrgencyAustralian Manufacturing PMI Contracts Further To A 4 Mth LowWestpac Index Finds Consumer Confidence In NZ Plummets FurtherECB’s Lane Says Rates Will Be Restrictive As Long As NecessaryBoE’s Bailey: Noticeable Inflation Drop Due In NovemberUK Consumer Confidence Rises To Highest Level Since January 2022US 10-Year Jumps Above Key 4.5% Level In Post-Fed Bond RoutYen Falls, Nikkei Futures Hold Losses As BoJ Stands PatOil Prices Rise As Supply Concerns Outweigh Demand FearsChevron And Unions Agree On Deal To End Australia LNG Strikes(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 4340Above 4350 opens 4380Primary resistance  is 4465Primary objective is 426620 Day VWAP bullish, 5 Day VWAP bearishEURUSD Bias: Bullish Above Bearish Below 1.07Above 1.860 opens 1.0945Primary resistance is 1.1066Primary objective is 1.0620 Day VWAP bearish, 5 Day VWAP bearishGBPUSD Bias: Bullish Above Bearish Below 1.2350 Above 1.2350 opens 1.2450Primary resistance  is 1.2750Primary objective 1.2320 Day VWAP bearish, 5 Day VWAP bearishUSDJPY Bias: Bullish Above Bearish Below 147.50Below 147 opens 146.40Primary support 144.50Primary objective is 15020 Day VWAP bullish, 5 Day VWAP bullishAUDUSD Bias: Bullish Above Bearish Below .6450Above .6475 opens .6525Primary resistance  is .6620Primary objective is .632020 Day VWAP bearish, 5 Day VWAP bearishBTCUSD Bias: Bullish Above Bearish below 27500Above 28200 opens 30000Primary resistance  is 28175Primary objective is 2330020 Day VWAP bearish, 5 Day VWAP bearish