Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Markets mostly turned lower on Tuesday
Information is not investment advice
Ichimoku Kinko Hyo
AUD/JPY: The AUD/JPY pair is now testing the upper level of the Kumo. An upward wave would lead the exchange rate to retest the previous peak. On the other hand, a break back below the upper level of the Kumo will push the market within the cloud, with further bearish implications.
Market View
Yesterday we saw one of the first indicators in regards to the impact on the Russian economy as the service PMI for March falls to 38.1 from 52.1 in February. The decline in business activity and new orders (both domestic and foreign) explains the setback as firms also cut back on staffing amid weak demand. Looking ahead, further decline in the indices can be anticipated as western supplies are further curtailed over time plus new sanctions being considered, suggesting that the worst has not been seen yet.
Yesterday EU announced that they are set to stop buying Russian coal in the next leg of sanctions, and only ending oil and gas at a later stage, however a date was not specified.
In the equity space, markets mostly turned lower on Tuesday. Value outperformed growth by more than 100bp and defensive stocks beat cyclicals. Dow Jones closed lower by -0.8%, S&P500 -1.3% and NASDAQ -2.3%.
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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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European Currencies Ahead of the Banks' Statements
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.
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.
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