Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EURUSD is still in the low 1.05 area
Information is not investment advice
Ichimoku Kinko Hyo
NZD/JPY: The NZD/JPY pair is now testing the lower level of the cloud. A tumble of the market will lead the exchange rate to exit the Kumo, targeting the previous low. Alternatively, an upward wave would push prices towards the upper level of the cloud.
Yesterday there was a trading error at a trading desk at Citigroup in London that caused the sudden drop of 8% in OMX in Sweden that immediately spread to the other Nordic and European bourses. Note that markets very quickly recovered the drop and the OMX Stockholm 30 Index closed down by 1.9% in line with other European indices.
Equities in different directions, as US rebounded from Friday's markets and Europe was in catch-up. Sector performance reversed, with tech rebounding and defensive stocks like consumer staples underperforming. Dow Jones closed marginally higher +0.3%, S&P500 0.6%, and NASDAQ 1.6%. Futures point to another positive opening today.
In the FX space, EURUSD is still in the low 1.05 area, while EURGBP continues to range-trade around 0.84 as expected.
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.