Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Economic confidence for the Eurozone is expected to rise slightly in August
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The USD/JPY pair is now trading out of the cloud. A new bearish sentiment is in force.
European Market View
As expected, the Fed has now officially changed regime from a traditional 2% inflation target to a flexible average inflation target.
The positive sentiment in the US equity market continues on the back of the very dovish statement from Fed Chairman Powell.
Economic confidence for the Eurozone is expected to rise slightly in August compared to July as the global economy is strengthening.
In the US, today's monthly private consumption data for July are going to be interesting.
Retail sales grew – again- in July (despite high-frequency indicators suggesting otherwise) but it may be the case that consumers substituted away from services into goods. Everything will be more clear at 14:30 CEST.
European Key Point
- Fed has now officially changed regime from a traditional 2% inflation target.
- The positive sentiment in the US equity market continues.
- Economic confidence for the Eurozone is expected to rise slightly in August.
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.
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.