Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EUR/USD stabilized somewhat on Friday, but it could be further downside risk
Information is not investment advice
Ichimoku Kinko Hyo
AUD/JPY: The AUD/JPY pair is now trading above the cloud. A higher thrust of the market would trigger the currency pair to retest the previous peak. A failed attempt to move higher will push prices to find support at the upper level of the Kumo.
European Market View
Trading in Evergrande's shares in the Hang Seng exchange was halted early Monday morning, as the company is reported to be in a process to sell 51% of its property management unit Evergrande Property Services.
Solid macro and an avoided government shutdown sent U.S. markets higher and lifted Europe off worst levels. Value investing was in fashion again, alike the rest of last week, with communication services, financials, and materials among the outperformers. Meanwhile, quality/defensives like healthcare and utilities lagged behind. All in all, S&P 500 ended 1.2% higher, Dow 1.4% and the technology index NASDAQ 0.8% higher.
Risk-off appears to be back in markets today though, with US futures pointing lower. Similarly, Asian markets show broad declines this morning fuelled by Evergrande suspending trading in its shares. China and South Korea are closed for holiday.
In the FX space, EUR/USD stabilized somewhat on Friday, but it could be further downside risk.
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.