Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
GBP/USD : recaptures 1.3900 amid UK reopening, Brexit optimism
Information is not investment advice
Ichimoku Kinko Hyo
CHF/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 and before NFP.
EU Market View
Asian shares started the week in a cautious mood on Monday, as a spike in coronavirus cases across the region over the weekend hurt investor sentiment while oil hovered around 2-1/2 year highs. Investors were concerned about a spike in coronavirus infections in Asia, with Australia's most populous city of Sydney plunging into a lockdown after a cluster of cases involving the highly contagious Delta strain ballooned.
Indonesia is battling record high cases while a lockdown in Malaysia is set to be extended. Thailand too announced new restrictions in Bangkok and other provinces.
Chinese shares were a touch higher with the CSI300 index up 0.2%. Data over the weekend showed profit growth at China's industrial firms slowed again in May as surging raw material prices squeezed margins and weighed on factory activity.
The dollar was largely unchanged in early European trade Monday, maintaining a firm tone after recent inflation data as the market prepares for this week’s key payrolls release. The dollar took an initial hit on Friday following the release of the Federal Reserve’s favorite gauge of inflation, the core US CPI This increased 0.5% in May, short of expectations for a 0.6% rise, which reassured some that inflation is not running out of control. Even so, the year on year was 3.4%, the biggest jump since 1992, and failed to completely quell fears that the Federal Reserve will be forced to normalize monetary policy sooner than it currently expects.
Adding support to the greenback were comments from Federal Reserve Bank of Boston President Eric Rosengren on Friday, who suggested the central bank could consider an interest-rate hike as soon as late 2022 as the labor market reaches full employment. With this in mind, Friday's nfp will be the market’s key focus this week, with economists expecting an increase of 675,000 jobs.
EU Key Point
- Germany May import price index +1.7% vs +1.3% m/m expected.
- Germany reports 219 new coronavirus cases, 8 deaths in latest update today.
- Moody's is optimistic Chinese authorities will continue to lower systemic risks in the fintech sector.
- US air strikes against Iran-backed militia in Syria and Iraq.
- UK Chancellor Sunak UK Health minister - hopes up for July 19 reopening.
- Australia coronavirus - lockdown extended over a much greater area of Sydney.
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.