Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Asian stocks started in green this morning
Information is not investment advice
Ichimoku Kinko Hyo
GBP/JPY: The GBP/JPY pair is now trading above the cloud. A bounce up from current levels will fuel the pair above the Kijun sen level and then higher to exceed the Tenkan sen level.
European Market View
In the equity space it was a quiet day yesterday resulted in modest gains driven by US and mostly cyclical companies. Some few travel stocks perform on the back of US opening up for international travel. However, despite the positive sentiment, VIX made its third consecutive move higher. In the US, major indices closed as follows: Dow Jones up by +0.3%, S&P 500 up by +0.1%, and NASDAQ up by +0.1%. Asian stocks started in green this morning but have lost momentum and are trading lower driven by Japanese stocks. European and US futures are down.
In the FX space, NZD, NOK and GBP gained against the USD and CHF yesterday, where several Fed speakers gave hints about the monetary policy outlook, but failed to move the market. EURUSD rose slightly towards 1.1600.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?