Daily Alert – Tuesday 31st October 2023: Eurozone inflation (and growth) falling

Mark NugentDaily Alert, October 2023

Daily Alert – Tuesday 31st October 2023: Eurozone inflation (and growth) falling

Good afternoon.

Eurozone inflation (Headline Harmonised Consumer Price Index, y/y October) has dropped to 2.9%, its lowest level in two years, from a September reading of 4.3%. Eurozone GDP (y/y, October) weakened to 0.1% form 0.5% in September. So, all the European Central Bank’s rate hikes are working. Maybe too well?

The Bank of Japan has removed their 1% cap on their 10-year bond yield. This is part of their yield-curve-control (YCC) policy and is different to the monetary policy approach taken by the other major central banks. The net effect is that demand for JPY will fall, and the markets have reacted immediately to this with a large drop on the JPY index and a rising USDJPY. If you want to read a brief primer on YCC, I have written something HERE.

I will be looking at USDJPY tonight. I may try to trade today’s movement as a reversal.

I’ll be back tomorrow.

VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE