Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EUR/GBP: Enters a long time of consolidation era
Information is not investment advice
Ichimoku Kinko Hyo
CHF/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
XAU/USD: Gold continuous to stand above 50% retracement area. Gold bulls appear very strong.
EU Market View
Asian shares reversed early losses on Thursday and traded near two-week highs while the dollar held at a one-week top as investors awaited key U.S. data to gauge whether inflationary pressures were transient or signalled a more durable turn. The monthly U.S. personal consumption report is due out on Friday while U.S. gross domestic product and jobless claims numbers are expected later in the day. Global equity market has been supported by an effort from major central banks who have pumped trillions of dollars into financial markets since last year while reiterating their lower-for-longer interest rate stance.
Earlier this week, U.S. Federal Reserve Vice Chair Richard Clarida said he believed recent inflation pressures would “prove to be largely transitory,” though he did add that policymakers will be at a point to begin discussing tapering in upcoming meetings. However, remarks from the Fed Vice Chair ,suggested that at some stage it will become important for the U.S. central bank to discuss plans to tighten its asset purchase programme.
The dollar moves higher in European trade Thursday, finding support from commentary suggesting the Fed will soon have to discuss tapering its massive bond-buying program, thus tightening monetary policy. However, the U.S. currency received some strenght late Wednesday when Randal Quarles, the Fed Vice Chairman , stated that the central bank will need to start discussing shortly plans to reduce its bond purchases if the economy continues to show massive improvement as it emerges from the pandemic.
The euro fell to $1.2170, declining for a second straight session after the European Central Bank's Executive Board’s Director, Panetta supported it was too early to taper its emergency bond buying programme.
Gold was down on Thursday morning in Asia after hitting a 4.5 high hit in the previous session as investors await key economic data in the U.S. to be released later in the day.
EU Key Point
- France's Le Maire says that economic activity is restarting very quickly.
- Germany June GfK consumer confidence -7.0 vs -5.2 expected.
- Germany reports 6,313 new coronavirus cases, 269 deaths in latest update today.
- US President Biden backs an Alaska oil project (Willow) approved under Trump.
- China industrial profits in April strong again.
- South Korea's central bank governor says Bank will maintain easy policy for a while.
- China will extend more support to micro & small enterprises (MSEs) and self-employed.
- US and China trade negotiators making positive noises after talks on phone.
- Coronavirus - Australia's second-largest state, Victoria, sent into a 7-day lockdown.
- South Korea central bank leaves its key rate unchanged (as expected).
- China says it supports probe in COVID-19 origins.
- China's bans lenders from selling commodity futures-linked products to retail investors.
- US Dept of Justice is said to be opening an investigation into the Archegos blowup.
- Japan is extending wages/employment support through to the end of July.
- Dollar steadily climbs.
- Fed's Quarles: Still significantly short of measures for "substantial further progress".
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.