FTSE 100 SLIPS AS UK BRACES FOR MORE SHIPPING DELAYS

UK stocks declined as investors continued to worry about the growing logistics challenges facing the country. This is after it was reported that many shipping companies like Maersk were diverting their ships away from the UK because of the backlog of arrivals. The company has diverted its big ships to other European countries. They will then be shipped to the UK using smaller ships and even trucks. Therefore, many UK companies are expected to see higher costs and delays. For example, in a statement on Monday, Asos lowered its revenue guidance because of these issues.

The British pound jumped slightly after the latest positive employment data from the UK. The data showed that the country’s unemployment rate declined from 4.6% in July to 4.5% in August. This was the lowest level since the pandemic started. At the same time, the number of claimant count in September declined to 51.1k in September while wages rose by 7.2% in August. Therefore, with the country’s inflation rising, analysts are pricing in a situation where the Bank of England (BOE) will tighten sooner than expected.

The sell-off of the Japanese yen continued today even after the relatively strong producer price index (PPI). The numbers showed that the headline PPI rose from 0.1% in August to 0.3% in September. This increase was in line with what analysts were expecting. At the same time, the PPI rose from 5.8% to 6.3%. As such, there are concerns because the gap between the CPI and PPI has widened substantially. Other key numbers that came out today were New Zealand’s retail sales, Turkish retail sales, and German ZEW current conditions data.

USDJPY

The USDJPY pair rose to a high of 113.4 as the sell-off of the Japanese yen continued. The pair remains above the important support levels at 112.14 and 110.80, which were the highest levels in September and August. It is also above the 25-day and 50-day moving averages while the MACD and the Demarker indicator has continued to rise. Therefore, while the bullish trend remains intact, there is a possibility that a short pullback is possible.

EURUSD

The EURUSD pair was little changed as investors wait for the upcoming US consumer price index (CPI) data scheduled for tomorrow. The pair is trading at 1.1560, where it has been in the past few days. It has formed a bearish flag pattern and moved below the 25-day and 50-day moving averages. The MACD has formed a bullish divergence pattern. Still, because of the bearish flag pattern, it will likely break out lower in the near term.

GBPUSD

The GBPUSD pair held steady after the latest UK jobs numbers. The pair rose to a high of 1.3610, which was an important resistance level since it was the lowest level in August. On the four-hour chart, it has formed a bullish flag pattern. It has also moved to the 25-day and 50-day moving averages. The Relative Strength Index (RSI) and the MACD are at the neutral level. Therefore, the pair will likely break out higher in the next few sessions.