Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
GBP/USD : sellers eye key support on break below 1.4000 after the FOMC
Information is not investment advice
Ichimoku Kinko Hyo
CAD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
Fibonacci Levels
XAG/USD: Silver continuous to stand below 38.2% retracement area. There is an indecision between bulls and bears.
EU Market View
. European shares pulled back from record highs on Thursday, tracking overnight declines on Wall Street after the Federal Reserve surprised investors by indicating it could start tapering its massive stimulus sooner than expected. he dollar rose in early European trade Thursday, climbing to levels not seen for around two months after the Federal Reserve surprised markets with a hawkish turn, bringing forward its timetable for raising interest rates to 2023. The U.S. Federal Reserve concluded its latest two-day policy meeting on Wednesday, and surprised no one by maintaining the current levels of interest rates and monthly bond purchases. However, the jolt came when new projections saw 11 of 18 central bank policy makers plan for two interest rate increases of 25 basis points in 2023, a year earlier than expected, and a sharp change from the previous meeting when none of these officials were looking for hikes during that year.
With inflation soaring and the economy recovering quickly from the stresses brought about by the pandemic, the market had been expecting the Fed to discuss a timetable for reining in its massive bond-buying program. But this hawkish turn surprised. A more extreme reaction could lay ahead if signs appear of stronger-than-expected inflation and other factors that could push the Fed to taper faster than anticipated, some market participants said. Powell said policymakers are not facing a situation where they are "behind the curve."
It is still premature and unnecessary to discuss the end of the European Central Bank's emergency bond purchases, ECB chief economist Philip Lane said on Thursday, adding a lot of data is still missing before an important policy meeting in September.
Crude oil prices fell on Thursday as the U.S. dollar strengthened after the Federal Reserve signaled it might raise interest rates faster than expected, but losses were limited
EU Key Point
- UK economy may be near pre-pandemic output levels.
- SNB's Jordan: Anchored inflation expectations speak for loose policy.
- SNB leaves policy rate unchanged at -0.75%, as expected.
- USD/CAD looks to come up for air after Fed's hawkish tilt.
- EUR/USD extends fall to two-month lows on post-FOMC hangover.
- ECB's Lane: It is premature to talk about end of PEPP.
- Germany reports 1,330 new coronavirus cases, 105 deaths in latest update today.
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Brutal session in the equity markets yesterday
Ichimoku Kinko Hyo EUR/JPY: The EUR/JPY pair is now trading within the Kumo…
The U.S. economy added 390,000 jobs in May
Ichimoku Kinko Hyo USD/JPY: The USD/JPY pair is now trading above the Kumo…
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Will the FOMC Surprise the Markets?
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.
What awaits the Oil Market in February?
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.
Will USDJPY slide lower in 2023?
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?
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