Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EURUSD continues to hover around 1.05
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The USD/JPY pair is trading within the Kumo. An upward wave would lead the currency pair to exit the cloud, targeting the previous top. On the other hand, further drop of the market will push prices to find support at the lower level of the Kumo.
Chinese PMI released over the weekend fell substantially in the month of April as the "zero-Covid" lockdowns hampered not only manufacturing production but also service production. Manufacturing PMI fell from 49.5 to 47.4 and service from 48.4 to 41.9 - the latter being the lowest since February 2020.The statistics bureau said that the drop both reflected declines in de supply and demand.
In Europe, EU energy ministers are due to hold an emergency meeting today to discuss the implications of the Russian decision to cut off the gas deliveries to Poland and Bulgaria last week. It seems that an oil embargo on Russia will be on table as Germany have now confirmed that it can replace Russian crude deliveries by late summer. However, the weak Chinese PMI data have pushed priced down towards USD 106 USD a barrel this morning.
In the FX space, EURUSD continues to hover around 1.05. The Norwegian Krona was the biggest loser among majors last week posting a loss of almost 5% vs the USD.
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.