Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EURUSD has moved back above 1.09
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The USD/JPY pair is now trading near the previous top. An upward wave would lead the exchange rate into fresh highs. Alternatively, a plunge of the market might bring the currency pair into a correction phase below the Tenkan sen level.
President Macron topped the first round of the presidential election and will face far-right Nationally Rally candidate Marine Le Pen in the run-off on 24 April. While Macron's first round lead (28%) over Marine Le Pen (24%) was bigger than he in 2017, polls point to a much narrower race for the second round (53-47%). With Macron's re-election far from assured, markets will keep a close eye on polls in the coming two weeks.
In the equity space, stocks ended marginally higher last week but once again driven by the value defensive universe. On Friday Dow Jones ended higher by +0.5%, S&P 500 lower -0.2% and NASDAQ -1.2%. Very large moves in yields continuing this morning taking both European and US futures lower. Markets in Asia lower as well with China tech leading the declines.
In the FX space last week was about the strengthening of dollar and a drop in EUR. However, on Sunday opening the single currency did mark a slight relief rally after Macron's win in the first round of the presidential elections in France yesterday. EURUSD has moved back above 1.09 while EURJPY was trading at 136.50 at the time of writing.
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.