Brent: Future is Still Sunny
What happened? Brent returned to the rising channel on Wednesday by gaining 4% during the trading session…
EUR/USD : big funds are buying downside correction
Information is not investment advice
Ichimoku Kinko Hyo
USD/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 day by day.
EU Market View
Asia-Pac stocks were mostly positive in what was a modest improvement from the subdued performance on Wall Street. Asian shares rose on Wednesday and the U.S. dollar languished near multi-month lows after U.S. Federal Reserve officials reaffirmed a dovish monetary policy stance, reassuring investors worried about the prospect of rising inflation. Richard Clarida, the Fed's vice chair, said on Tuesday that the U.S central bank would be able to curb an outbreak of inflation and engineer a "soft landing" without throwing the country's economic recovery off track. All the same, Clarida's comments reflect a shifting tone at the Fed. A month ago, Fed Chair Jerome Powell said it was "not yet" time to even contemplate discussion of policy tapering, but more recently policymakers have acknowledged they are closer to debating when to pull back some of their crisis support for the U.S. economy.
A similar shift was evident in New Zealand, where the central bank held interest rates at a record low on Wednesday but hinted at a hike as early as September next year. The prospect of higher rates sent the New Zealand dollar soaring more than 1%.
The dollar edged lower in early European trade Wednesday, trading near its lowest levels since early January as Treasury yields weakened with Federal Reserve officials continuing to present a dovish view. Federal Reserve officials have been keen this week to get the message across that they see any elevated inflation pressures as temporary and thus the central bank will keep its current dovish monetary policy unchanged for now. The European Central Bank should not reduce the pace of asset purchases from next month, ECB board member Fabio Panetta said on Wednesday, joining a growing chorus of policymakers calling for continued stimulus. With the recovery now well underway, pressure is growing on the ECB to start curbing its emergency measures. But several key policymakers have pushed back in recent days, suggesting that any reduction in asset buys after the June 10 policy meeting is highly unlikely.
Gold was up on Wednesday morning in Asia, erasing its 2021 losses as signs of inflationary pressures stoked investor concerns and the U.S. Federal Reserve assured investors on the outlook for monetary policy.
EU Key Point
- France May business confidence 108 vs 98 expected.
- ECB's Panetta: Does not see signs that inflation path is shifting upward.
- BOJ's Suzuki: Wants to see a little more moves in yields.
- Germany reports 2,626 new coronavirus cases, 270 deaths in latest update today.
- Japan ruling party official says BOJ must seek to weaken yen further.
- RBNZ Gov Orr press conference concludes: Says cash rate projections are very highly conditional.
- NZD/USD rising above 0.7300 as RBNZ Governor Orr speaks.
Gerasimos Papagiannis
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