Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
AUD/JPY: Risk averse gains ground after inflation fears
Information is not investment advice
Ichimoku Kinko Hyo
GBP/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
Fibonacci Levels
XAG/USD: Silver continuous to stand below 23.6% retracement area. Bullish pressure is growing during the last hours.
EU Market View
Asia-Pac bourses traded with firm losses amid spillover selling from the tech-led declines on Wall St. US Senate Republicans reportedly signalled that they could increase the infrastructure counter proposal to President Biden. Looking ahead, highlights include German ZEW, Australian budget, US JOLTS, OPEC MOMR, Fed's Williams, Brainard, Daly, Bostic, Harker, Kashkari, BoE's Bailey speeches. Asian tech stocks tumbled on Tuesday and European equity futures dropped after a selloff on Wall Street as investors braced for U.S. inflation data and China's ongoing anti-monopoly crackdown weighed on the country's tech majors.
European stock markets are seen weakening at the open Tuesday, following the previous session’s tech-led selloff on Wall Street on increased inflation worries. Suggestions that the European Central Bank (ECB) could begin winding down exceptional bond purchases early are "purely speculative", ECB policymaker Francois Villeroy de Galhau said on Tuesday. Villeroy, who is also governor of the French central bank, pushed back against recent comments by more hawkish members of the ECB who have suggested it could decide to slow bond purchases soon.
Oil was down Tuesday morning in Asia, with the extended closure of Colonial Pipeline’s key U.S. East Coast gasoline pipeline curbing appetite for the black liquid.
Inflation concerns will mean the U.S. CPI reportwill be at the forefront of investors’ attention when it’s released on Wednesday. Ahead of that, and back in Europe, the Germany’s ZEW survry of economic sentiment for May will be the main data release, and is expected to show an improvement in confidence in the Eurozone’s most important economy.
EU Key Point
- ECB's Villeroy: Will continue with PEPP at least until March 2022
- China's once a decade population census shows population growth has slowed dramatically
- ECB's Schnabel says German inflation could be above 3% this year, but the ECB is unconcerned.
- Fed's Kaplan said (again) its good to start talking taper sooner rather than later.
- US authorises Pfizer-Biontech COVID-19 vaccine for 12-15 age group.
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Brutal session in the equity markets yesterday
Ichimoku Kinko Hyo EUR/JPY: The EUR/JPY pair is now trading within the Kumo…
The U.S. economy added 390,000 jobs in May
Ichimoku Kinko Hyo USD/JPY: The USD/JPY pair is now trading above the Kumo…
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European Currencies Ahead of the Banks' Statements
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
Will the FOMC Surprise the Markets?
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.
What awaits the Oil Market in February?
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.
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