Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
European and Asian equity markets are recovering this morning.
Information is not investment advice
Ichimoku Kinko Hyo
AUD/JPY: The AUD/JPY pair is now testing the upper level of the Kumo. Any successful attempt to move higher will fuel the pair towards the Kijun sen level and even higher towards the previous peak. On the other hand, a reversal back would lead the market deeper within the cloud.
As the crisis continues in Turkey, yesterday USDTRY dropped from about 18.30 to 12.50 in a matter of hours. Finally, it settled at around 13.40 which marks a drop of about 30%. The drop came as a result of President Erdogan’s offering to floor lira deposits at zero percent returns again some other currency. There are not many details out in the media of how this offering will work, and if it has any material effect in the currency, remains to be seen.
In the equities space, markets dropped yesterday as Omicron cases are rising rapidly. In the United States, Omicron cases account about 73% of the total whereas only a week ago they accounted for 3%. It is important to mention that markets closed far off day lows and futures market shows that most of yesterday’s losses have been regained. Major indices in the U.S. closed as follows: Dow Jones down 1.2%, SP500 down -1.1% and NASDAQ down -1.2%. European and Asian equity markets are also recovering this morning.
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.