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Daily Pivots: (S1) 143.80; (P) 144.33; (R1) 145.17; More....

Intraday bias in EUR/JPY stays on the upside for 145.62 resistance. Firm break there will confirm up trend resumption. Next target is 100% projection of 133.38 to 145.62 from 137.32 at 149.56, which is close to 149.76 long term resistance. On the downside, break of 140.88 will extend the corrective pattern from 145.62 with another falling leg.

In the bigger picture, as long as 133.38 support holds, the up trend from 114.42 (2020 low) could still extend through 145.62 high. In that case, next target is 149.76 (2015 high). However, sustained break of 133.38 will be a sign of medium term bearish reversal and bring deeper fall to 124.37 support first.

Daily Pivots: (S1) 0.8643; (P) 0.8679; (R1) 0.8735; More...

Intraday bias in EUR/GBP remains neutral for the moment , and further decline is expected with 0.8869 resistance intact. On the downside, break of 0.8607 will resume the fall from 0.9267, and target 61.8% projection of 0.9267 to 0.8647 from 0.8869 at 0.8486.

In the bigger picture, current development suggests that fall from 0.9267 is a down leg inside long term range pattern. Deeper fall could be seen towards 0.8201/8338 support zone. But strong support should be seen there to bring reversal.

Daily Pivots: (S1) 1.5509; (P) 1.5598; (R1) 1.5763; More...

Intraday bias in EUR/AUD stays on the upside at this point. Current rally should target 161.8% projection of 1.4281 to 1.4965 from 1.4716 at 1.5823. On the downside, break of 1.5429 minor support will turn intraday bias neutral and bring consolidation first, before staging another rally.

In the bigger picture, a medium term bottom should be in place at 1.4281, on bullish convergence condition in daily MACD. Further rise would be seen back to 1.6434 key resistance next. Break of 1.4965 resistance turned support is needed to indicate reversal. Otherwise, further rally will remain in favor.

Daily Pivots: (S1) 0.9749; (P) 0.9771; (R1) 0.9801; More....

Intraday bias in EUR/CHF remains neutral for the moment. On the upside, break of 0.9798 will target 61.8% projection of 0.9407 to 0.9798 from 0.9641 at 0.9883. Decisive break there will solidify the case of medium term bottoming and target 100% projection at 1.0032. This will remain the favored case as long as 0.9641 support holds.

In the bigger picture, considering bullish condition in daily MACD, firm break of 0.9864 resistance will confirm medium term bottoming at 0.9407. Stronger rally should then be seen to 55 week EMA (now at 1.0138), even as a corrective rebound. Nevertheless, rejection by 0.9864 will bring down trend resumption through 0.9407 next.

Market movers today

We kick off the week with a thin key figures calendar. In the US, we get the Empire manufacturing PMIs.

In Sweden, Moderate leader Ulf Kristersson will face the PM vote today at 11.00 CET.

Markets' focus will circle on politics this week with the EU council meeting on Thursday, where an EU gas price cap will be on the agenda.

China's 20th National Congress of the Communist Party kicked off yesterday and lasts for about a week. With no changes to "zero-Covid policies" in the pipeline, focus will not least be on the revelation of China's new Standing Committee.

The unfolding of UK politics and the effects on the Gilts market have been key market movers over the last couple of weeks and will likely draw more attention.

Markets will also stay alert to any news of actual FX intervention from Bank of Japan after USD/JPY has reached the highest levels since 1990.

The 60 second overview

China CPC Congress: Chinese President Xi Jinping yesterday opened China's 20th National Congress of the CPC with the read-out of the Work Report, which is a report always prepared for the Congresses that outlines results over the past five years and outlines policies and goals for the coming years and decades. The report had few surprises as policies were pretty much the same as outlined on previous occasions such as in the Five Year Plan released last year. Challenges, risks and security had an even more prominent role this time, though, as China faces severe challenges both from the US tech war as well as domestic challenges with property crisis and the pandemic still affecting the economy. As expected, there was no indication of change to the zero-Covid policy. Over the coming week, meetings will mostly be held behind closed doors and the next action will be on Sunday when the new Standing Committee, China's top leadership is revealed. Xi will probably also be elevated to 'People's leader', a title that will cement his power. See also Research China - Security and risks highlighted in Xi's opening of Congress, 17 October.

UK: During Friday, there was a large focus on both the political situation and the Bank of England's (BoE) last day of the re-introduced temporary QE-program. Headlines of a potential U-turn on the tax package initially resulted in a rally in gilts markets. Liz Truss sacked her Chancellor Kwarteng, named Jeremy Hunt as her new Chancellor and held a press conference which gave more questions than answers. She backtracked on the corporate tax cut, which accounts for GBP 18bn of the announced GBP 43bn fiscal plan set out with the mini-budget on 23 September. In the end, markets were not really impressed and there was a sell-off in gilts with the 30Y ending the day 40bps higher, as the cancellation of the 18bn tax cut will probably not be enough to put the UK back on track on a sustainable fiscal path. As the BoE's emergency bond buying program has now come to an end, there is a large risk of further volatility during the week. Bond auctions on both Tuesday and Wednesday will be important to follow.

PBoC: The People's Bank of China (PBoC) rolled over 500 billion yuan maturing medium-term policy loans while keeping the interest rate unchanged at 2.75% this morning. According to PBoC, this was to "keep banking system liquidity reasonably ample" and to "fully meet financial institutional demand".

Equities: If there is something this year has highlighted, equity rallies are not long lasting when fundamentals do not allow it. This message was echoed on Friday, where the Thursday rally quickly erased in the US cash session. S&P 500 dropped -2.3%, Nasdaq -3.1%, Russell 2000 -2.7% and Dow -1.3%. Guess what - defensives outperformed cyclicals and value outperformed growth. Recognize it? Probably, as markets have played the same note since summer. Two things differing from the classic risk-off trading is small caps and quality stocks holding up - despite US yields being 60bp higher over the month and real rates 150bp since August. To us, this illustrates the balancing act of short-term inflation and longer-term recession. Asia opened in red this morning, with MSCI's broadest index of Asia-Pacific shares outside Japan down 1.1% and Nikkei down 1.4%.

FI: A bit of sideways trading on Friday until Vasle called for two 75bp rate hikes this year, which caused a bear steepening in the euro curves with underperformance of the periphery (6bp to BTPs-Bund widening). Bunds rose 7bp to 2.36%.

FX: Higher yields, a decline in commodity prices, high equity volatility and UK politics set the tone for FX markets towards the end of last week. The USD generally stood out as a top-performer only surpassed by the HUF following the National Bank of Hungary's (NBH) surprise hike of its overnight rate from 15.5% to 25%. In the other end of the spectrum, GBP came under renewed pressure while commodity currencies in the likes of AUD, NZD and NOK also suffered. USD/JPY has notably reached new highs above the 148 mark.

Credit: The credit markets ended last week on a slightly negative note. During Friday, iTraxx main widened marginally to 131bp while Xover widened 7bp to 625bp. The weakness in the CDS market was also visible in the cash bond market, where secondary bond trading and primary markets remained very inactive.

Nordic macro

In Sweden, we have a PM vote to look forward to. Following Friday's announcement of the "Tidö-deal" by the majority parties Moderates, Christian Democrats, Liberals and Sweden Democrats, Moderate leader Ulf Kristersson will face the PM vote today at 11.00. As he is backed by a (slim) majority of mandates, any dissenters would make it a close call, but best guess is that he wins the vote.

Daily Pivots: (S1) 0.9688; (P) 0.9748; (R1) 0.9789; More...

Intraday bias in EUR/USD remains neutral for the moment. Deeper decline is expected with 0.9998 resistance intact. Below 0.9630 will bring retest of 0.9534 low first. Firm break there will resume larger down trend. However, break of 0.9998 will confirm short term bottoming and turn bias back the upside for stronger rebound.

In the bigger picture, down trend from 1.6039 (2008 high) is still in progress. Next target is 100% projection of 1.3993 to 1.0339 from 1.2348 at 0.8694. In any case, break of 0.9998 resistance is needed to be the first sign of medium term bottoming. Otherwise, outlook will stay bearish even with strong rebound.

Daily Pivots: (S1) 1.1100; (P) 1.1233; (R1) 1.1314; More...

Intraday bias in GBP/USD remains neutral for the moment. On the upside, break of 1.1494 will resume the rise from 1.0351 to 61.8% projection of 1.0351 to 1.1494 from 1.0922 at 1.1628. On the downside, below 1.0922 will turn bias back to the downside for 1.0351 low instead.

In the bigger picture, fall from 1.4248 (2018 high) is resuming long term down trend from 2.1161 (2007 high). Next target is 100% projection of 2.1161 to 1.3503 from 1.7190 at 0.9532. There is no scope of a medium term rebound as long as 1.1759 support turned resistance holds.

Daily Pivots: (S1) 0.9993; (P) 1.0029; (R1) 1.0094; More...

Intraday bias in USD/CHF remains neutral for the moment. On the upside, break of 1.0072, and sustained trading above 1.0063, will confirm larger up trend resumption. Next target is 1.0283 projection level. However, break of 0.9914 support will indicate rejection by 1.0063, and turn bias back to the downside for 0.9779 support first.

In the bigger picture, current development suggests that up trend from 0.8756 (2021 low) is still in progress. Sustained break of 1.0063 will target 100% projection of 0.9149 to 1.0063 from 0.9369 at 1.0283, and then 1.0342 (2016 high). For now, this will remain the favored case as long as 0.9369 support holds, even in case of deep pull back.

Daily Pivots: (S1) 147.59; (P) 148.23; (R1) 149.39; More...

Intraday bias in USD/JPY stays on the upside for the moment. Current up trend would target 61.8% projection of 130.38 to 140.33 from 145.89 at 149.91. Beware that Japan might intervene again there close to 150 psychological level. Nevertheless, break of 145.89 resistance turned support is needed to confirm short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, up trend from 101.18 is still in progress, as part of the whole up trend from 75.56 (2011 low). 147.68 (1998 high) was already met and there is not clearly sign of topping yet. In any case, break of 139.37 resistance turned support is needed to be the first sign of medium term topping. Otherwise, further rise is in favor to next target at 160.16 (1990 high).

Daily Pivots: (S1) 1.3758; (P) 1.3828; (R1) 1.3952; More...

Intraday bias in USD/CAD stays neutral for consolidation below 1.3976. Outlook will stay bullish as long as 1.3501 support holds. Firm break of 1.3976 will resume larger up trend, and target 200% projection of 1.2005 to 1.2947 from 1.2401 at 1.4285.

In the bigger picture, up trend from 1.2005 (2021 low) is still in progress. Based on current impulsive momentum, it could be resuming long term up trend from 0.9056 (2007 low). Whether it is or it isn't, retest of 1.4689 (2016 high) should be seen next. This will now remain the favored case as long as 1.3222 resistance turned support holds.