Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EUR/USD : gains before critical FOMC meeting
Information is not investment advice
Ichimoku Kinko Hyo
CAD/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 and before fomc.
EU Market View
Asian shares had a mixed day on Tuesday and the dollar sat near multi-week highs ahead of a much-anticipated Federal Reserve policy meeting, which investors are watching for hints of any change to the U.S. monetary policy outlook. The U.S. Federal Reserve starts its latest two-day policy meeting later Tuesday against a backdrop of sharply rising inflation as the country’s economy makes a solid recovery as it gradually reopens.
Fed officials, led by Chairman Jerome Powell, have been insistent that these inflationary pressures will be transitory and ultra-easy monetary settings will stay in place for some time to come. However, with positioning heavily loaded against the dollar, traders are wary of any shift in tone with a potential discussion about tapering its bond-buying.
Traders around the world are looking for any hints about whether and when the Fed plans to taper its bond buying programme, amid concerns from some quarters about inflation as the U.S. economy bounces back from the pandemic fallout. Nearly 60% of economists in a Reuters poll expect a taper announcement will come in the next quarter, despite a patchy recovery in the job market.
China's markets were closed on Monday for a holiday, meaning this was their first response to a joint statement by the Group of Seven leaders that had scolded Beijing over a range of issues which China called a gross interference in the country's internal affairs.
The dollar slipped marginally lower in early European trade Tuesday, but just off multi-week highs ahead of the latest two-day meeting of the Federal Reserve.
EU Key Point
- EU, US said to reach deal to resolve Boeing-Airbus dispute.
- UK May jobless claims change -92.6k vs -15.1k prior.
- Germany May final CPI +2.5% vs +2.5% y/y prelim.
- Germany reports 652 new coronavirus cases, 93 deaths in latest update today.
- More on the BOJ considering extending its COVID relief program past September.
- Ex BOJ policymaker says Bank likely to extend relief program at this week's meeting.
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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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