Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
AUD/USD remains weak as investors await FOMC
Information is not investment advice
Ichimoku Kinko Hyo
NZD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAU/USD: Gold facing a further weakness the last hours and trading below 23.6% retracement area.
US Market View
U.S. stocks are seen opening largely unchanged Wednesday, remaining near record levels amid rising investor optimism over the economic recovery as Covid-19 vaccination program runs. Stock markets have gained from the expectation of the Biden administration delivering a $1.9 trillion stimulus package later this month, while the government also announced Tuesday plans to acquire an additional 200 million doses of Covid-19 vaccines, enough to inoculate most Americans by summer.
Unpaid debt from pandemic-stricken borrowers has ravaged profits at Europe's big banks and kick-started a debate among politicians about whether they may ultimately need state help. While executives voice confidence, European officials worry the banks' problems have started. They fear more borrowers will default when government support, including billions of euros of loan guarantees in France, Spain and elsewhere, is unwound.
USA Key Point
- EU says it has reached new deal with Moderna for supply of 300 million vaccines.
- Dollar keeps more resilient ahead of North American trading.
- UK PM Johnson supports that lockdown should be eased in stages.
- German health minister says that data shows virus variants are spreading quickly in Germany.
- Draghi supports that Italy will not regain pre-pandemic levels before the end of 2022.
- Gold falls to fresh lows in over two months amid firmer dollar, higher yields.
- Cable tests key near-term support once again as dollar moves lower.
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?