Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Global equities moved higher Friday once again
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The EUR/JPY pair is now testing the lower level of the Kumo. Further bearish sentiment will push the market to test the previous bottom. Alternatively, if the currency pair manages to enter the cloud will attempt to retest the upper level of the Kumo.
European Market View
Global equities moved higher Friday once again, while Emerging Markets lagged driven by Chinese stocks. US stocks have had an impressive run with S&P500 higher in 16 out of the last 18 trading days. Friday gave renewed tailwind for value stocks after suffering Thursday. In the US on Friday, Dow Jones ended up higher by +0.6%, S&P 500 by +0.4% and NASDAQ by +0.2%. The positive tone from Friday on Wall Street has not carried over to EM where markets are lower this morning. Futures in Europe and US were also lower this morning.
In the FX space, EURUSD temporarily dropped to 1.1510 on the relatively strong US jobs report on Friday, however it quickly rebounded. EURGBP held on to the gains after the dovish BOE meeting Thursday trading in the 0.855-0.86 area.
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.