Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Oil price dropped another 5%, down 20% the last five trading days
Information is not investment advice
Ichimoku Kinko Hyo
CHF/JPY: The CHF/JPY pair is now trading slightly above the Kumo. An upward wave would lead the exchange rate to surpass the Tenkan sen level, targeting the previous top. Alternatively, a plunge of the market will push prices within the cloud.
The key event today will be the FOMC meeting, where consensus and markets are pricing in a 25bp hike. The Federal Reserve will also release its updated economic and rate projections.
In the equity space, stocks were higher yesterday despite the big drop in Hang Seng index.
Oil price dropped another 5%, down 20% the last five trading days and hence one of biggest fears from financial markets fading. The move higher in US equities supported by lower oil price and stabilizing yields resulted in tech outperforming energy and hence growth outperforming value. In US Dow Jones closed higher by +1.8%, S&P 500 +2.1%, and NASDAQ +2.9%.
Relief rally in Asia this morning with all markets higher and Hang Seng leading the advances. However, even with the relief in tech stocks this morning leaves them 65% below the peak a year ago. US futures are flat while European futures were about 0.5% higher at the time of writing.
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.