Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
GBP/JPY : Risk averse gains momentum
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAG/USD: Silver continuous to stand below 23.6% retracement area. Bullish pressure is growing during the last hours.
EU Market View
Asian equity markets traded mixed with the region cautious following the mostly negative lead from the US. Looking ahead, highlights include US IJC, Philadelphia Fed Business Index, SARB rate decision, ECB's Lane, Lagarde, BoE's Cunliffe, Fed's Kaplan. A selloff in cryptocurrencies, high-growth stocks and other high-flying assets may be signalling a more cautious outlook among market participants after a stretch of rampant exuberance.
Few believe the bull run that broader U.S. stock markets have experienced over the past year is set for a reversal. Still, concerns are growing that a looming rise in inflation combined with a potential peak in U.S. economic growth could force investors to cut down on risk in their portfolios, hurting many of the assets that shot higher earlier this year.
European stock markets are seen opening higher Thursday, rebounding after the previous session’s sharp losses as a receding pandemic allows the region to reopen its economy.Authorities across Europe are loosening restrictions as infection rates fall and vaccinations rise. The U.K. largely reopened on Monday, Italy, the original epicenter of the crisis in Europe, will phase out its national curfew in the coming weeks, and tough curbs are gradually easing across Germany.
Additionally, while Eurozone consumer price rose to 1.6% on an annual basis in April on Wednesday, this figure was still below the 2% threshold that makes the European Central Bank jittery, and nowhere near the levels seen in the U.S.
ECB chief Christine Lagarde said on Tuesday it was "essential that monetary and fiscal support are not withdrawn too soon”, suggesting that the region has a lot less immediate risk regarding central bank policy changes than across the pond.
Oil prices edged higher Thursday, rebounding to a degree after the sharp falls of the previous session when traders digested rising U.S. stockpiles, the prospects of more Iranian crude entering the market as well as worries of the Fed tapering back its ultra-easy monetary policies.
EU Key Point
- Germany April PPI +0.8% vs +0.8% m/m expected.
- Germany reports 12,298 new coronavirus cases, 237 deaths in latest update today.
- UK PM Johnson increasingly optimistic coronavirus restrictions can end as planned on June 21.
- A cease-fire in the fighting between Israel and the Palestinian militant group Hamas could come as early as Friday.
- Japan to end its 1% GDP cap on defence spending.
- AUD/USD up just a few ticks following the April jobs report.
- Japan trade balance for April Y 255.3bn (expected Y 147.7bn).
- China blocks another Australian export - Australia's Trade minister seeking answers.
- Japan May Tankan report: Both manufacturing and non-manufacturing indexes rise.
- GBP/USD: Further QE reduction to lift cable towards 1.50.
- ECB's Schnabel: Eurozone inflation surge is temporary, no need for rate hike now.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
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.