The news shaping the markets today

Ukraine’s troops recaptured the key bastion of Lyman in the eastern part of the country. The continued geopolitical tensions sent WTI crude oil prices higher this morning.

Singapore’s private home prices rose by 3.4% during the three months to September, versus 3.5% growth in the previous quarter, which exerted pressure on the SGD/USD forex pair.

Japan’s manufacturing PMI came in at 50.8 for September, versus the flash reading of 51.0 and compared to a final reading of 51.5 in August. The JPY/USD pair declined slightly in forex trading this morning.

Australia’s manufacturing PMI fell to 53.5 in September, from a preliminary reading of 53.9 and from 53.8 in August. However, the country’s manufacturing sector remaining in the expansion zone lent support to the AUD/USD forex pair.

Malaysia’s manufacturing PMI fell to 49.1 in September, from 50.3 in the prior month. This being the first time manufacturing activity contracted since March sent the MYR/USD pair lower in forex trading this morning.

What’s happening: The euro fell against the US dollar on Friday, following the release of Eurozone’s inflation data.

What happened: Inflation levels in the Eurozone surged to a record high, exerting pressure on the euro even against a declining US dollar.

Although the EUR/USD recorded gains for the week, the forex pair ended the quarter with losses.

Why it matters: The forex markets were highly volatile last week, as traders remained cautious about the pace of monetary policy tightening around the world.

Data released Friday showed Eurozone inflation surged past expectations, reinforcing prospects of another big rate hike next month by the European Central Bank.

Annual inflation rate in the Eurozone accelerated to 10% in September, from 9.1% in the prior month, reaching double-digits for the first time in history. The recent figure also came in higher than market expectations of 9.7% and marked the fifth straight month of increasing inflation.

The US Commerce Department also reported an increase in the personal consumption expenditures price index to 6.2% year-over-year in August, much higher than Fed’s target of 2%. The latest reading fuelled further concerns of the Federal Reserve continuing its aggressive monetary policy.

The US dollar index, which measures the greenback’s performance versus a basket of major rivals, slipped 0.07% to 112.17 on Friday. Although the US dollar index delivered its biggest quarterly upturn since the first quarter of 2015, it recorded its first weekly decline in the last three weeks.

The EUR/USD forex pair fell 0.13% to settle at 0.9802 on Friday, with gains of around 1.2% for the week. However, the euro ended the third quarter around 6% lower.

What to watch: Traders await the release of economic data on manufacturing PMI from the Eurozone today. The S&P Global Eurozone manufacturing PMI is expected to decline to 48.5 in September, from 49.6 in the earlier month, which would be the third straight contraction in the region’s factory activity.

The markets today

Bitcoin will be in focus today after recording quarterly gains

Context: The biggest cryptocurrency by market value recorded slight gains for the quarter, remaining above the $19,000 level.

Details: Most big asset classes remained under pressure last quarter due to a combination of factors, including surging inflation, rate hikes by major central banks and continued geopolitical tensions.

Against this backdrop, traders increased Bitcoin in their portfolios, and the crypto king ended the third quarter with gains. Bitcoin added around 3.7% in the quarter, after declining around 70% in the three months ended June 30.

The performance in the third quarter could be a sign of some stabilisation in the cryptocurrency space.

Ethereum, the second-biggest cryptocurrency, successfully completed its much-awaited Big Merge. The cryptocurrency gained around32% during the quarter.

What to watch: Investors await comments from Fed officials regarding their rate hike plans. The release of important economic reports could also provide some direction to Bitcoin and Ethereum.

Other Markets: US indices closed lower on Friday, with the Dow Jones index, S&P500 and Nasdaq 100 down by 1.71%, 1.51% and 1.73%, respectively.

Support & resistances for today

Market snapshot

What else to watch today

Russia’s manufacturing PMI, France’s manufacturing PMI and government budget value, Turkey’s inflation rate and manufacturing PMI, Spain’s manufacturing PMI and total vehicle sales, Italy’s manufacturing PMI and car registrations, Germany’s manufacturing PMI, UK’s manufacturing PMI, South Africa’s manufacturing PMI and total vehicle sales, Mexico’s manufacturing confidence index, manufacturing PMI and foreign exchange reserves, Brazil’s manufacturing PMI, balance of trade and Central Bank of Brazil’s focus market readout, India’s balance of trade, Singapore’s manufacturing PMI, Canada’s manufacturing PMI, as well as US S&P Global manufacturing PMI, ISM manufacturing PMI and construction spending.

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