Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Global equities down 2% yesterday
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The USD/JPY pair is set to eliminate the previous top. If that happens, the currency pair will reach fresh a high. Alternatively, a reversal back would push the market below the Tenkan sen level, towards the upper level of the Kumo.
The combination of higher energy prices and a weaker growth outlook put central banks in a tough spot. Yet with inflation spiking above most inflation targets and inflation expectations moving to decade highs in many countries most central banks have clearly indicated forthcoming tightening of monetary policy.
Global equities down 2% yesterday and down 5% in the last 5 trading sessions. Consumer discretionary and tech stocks were the two biggest losers and earnings reports yesterday did not make things any better. Yesterday in US, Dow Jones closed -2.4%, S&P 500 -2.8% and NASDAQ composite -3.9%. Markets in Asia this morning looking somewhat better with Chinese stocks slightly higher while most other markets lower. European futures slightly lower while US once slightly higher.
In the FX space, EURUSD moved lower that 1.06 this morning. JPY rebounded further yesterday but has lost most of the gains this morning.
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.