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4 Global Market Updates- 3 October, 2022

by Elena Martin   ·  October 3, 2022  

4 Global Market Updates- 3 October, 2022

by Elena Martin   ·  October 3, 2022  
In this article, we have covered the highlights of global market news about the EUR/CHF, AUD/USD, GBP/USD and USD/CNH.

EUR/CHF is expected to rise to 0.9000 – Credit Suisse

The Swiss National Bank (SNB) policy rate pricing in the present markets is subject to upside risks, according to economists at Credit Suisse. As a result, the EUR/CHF is likely to decline.

Upside dangers to the policy rate of the SNB. “We reduced our EUR/CHF goal for the end of the fourth quarter from 0.9400 to 0.9000 and think this view is invalidated above 0.9955,” (down from 1.0060 previously). The dangers of this perspective include a drop in international inflation rates and a considerable SNB rate hike cycle lag.

“We anticipate the SNB to keep raising rates, and we see upside potential for the present market’s policy rate profile. Currently, the SNB expects inflation to be 3.0% in 2022, 2.4% in 2023, and 1.7% in 2024. These estimates lead us to assume that the actual policy rate is still outside the restricted zone.

AUD/USD maintains rises in the mid-0.6400s but lacks follow-through ahead of the RBA meeting on Tuesday.

On Monday, modest buying in the AUD/USD pair at the 0.6400 level continued into the early European session. The two-day losing skid seems to have been broken temporarily by the pair, which is presently trading in the mid-0.6400s and is up 0.70% on the day.


The US dollar is under downward pressure from several sources, supporting the AUD/USD pair. In addition to giving the British pound a little boost, UK Finance Minister Kwasi Kwarteng indicated that his administration would not go through with a proposal to eliminate a 45% income tax rate. This puts USD bulls on guard, coupled with falling US Treasury bond rates.

The standard US 10-year Treasury note retreats from a 12-year peak reached last Wednesday. Additionally, the US dollar’s status as a haven is further weakened, which benefits the risk-averse Aussie and optimistic sentiment around US equities markets. Aggressive bulls should exercise care due to the absence of follow-through selling.

Ahead of Tuesday’s significant Reserve Bank of Australia policy announcement, traders now seem apprehensive and may opt to withdraw. Meanwhile, rising expectations that the Federal Reserve would raise interest rates at a quicker clip should support US bond yields and prevent the USD from falling too much. Consequently, this may limit the AUD/USD pair’s upward potential.

Therefore, it will be wise to hold off on making any more short-term appreciating moves until there has been substantial follow-through purchasing. The US ISM Manufacturing PMI, scheduled to be released later during the early North American session, is currently anticipated by the market. This will affect the USD and give the AUD/USD pair some momentum, coupled with US bond rates and the general risk mood.

GBP/USD could trade in a new range of 1.1000-1.1350, according to ING

On hearing of a policy U-turn, the pound has returned to levels before the “fiscal incident.” GBP/USD is predicted to fluctuate between 1.1000 and 1.1350 by ING economists.

“Liz Truss’ administration will officially reinstate the 45% income tax level. We believe this action is primarily symbolic and less about the little money it would save than the negative message it sent about ideological (unfunded) tax cuts.

It is now difficult to argue that cable should be trading much higher than that, given it had reverted to levels last seen shortly before Chancellor Kwasi Kwarteng delivered the notorious “fiscal event.” However, this does reduce the possibility of cable trading to parity by demonstrating that Downing Street will give financial markets more respect when evaluating policy choices.

“Perhaps we see a new cable trading range, say, 1.1000-1.1350.”
“Under 0.8700, EUR/GBP may find support right now.”


USD/CNH is expected to hit 7.35, according to Credit Suisse.

In China, the already dire situation of weak domestic demand is worsened by the worsening export prospects. Credit Suisse economists anticipate that USD/CNH will reach the 7.35 level.

“We anticipate that sluggish US/European demand will negatively impact exports and the CFETS Index. In light of this, we renewed our long position in USD/CNH with a target of 7.35 and predicted a more extensive trading range of 7.00–7.45 for Q4.

“We anticipate the new ministry to continue refraining from ‘flood style’ stimulus for the 20th Communist Party Congress. Similarly, the Covid limitations will only be lifted gradually, maybe in 2023.

“We anticipate that President Xi will continue to enforce Covid limitations and the dictum that “housing is for living, not for speculation. As a result, Q4’s consumption and investment growth will probably stay poor.

Please click here for the Market News Updates from 2 October, 2022.