Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Risk aversion stays the course so far on the session and before ECB
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
Fibonacci Levels
XAG/USD: Silver facing a significant weakness and it is trading near above 50% retracement area.
US Market View
U.S. stock markets and bond yields are set to open sharply lower as investors unwind previous bets on strong growth and relatively high inflation continuing into the medium term. The delayed 2020 Summer Olympic Games will take place without spectators, after Prime Minister Yoshihide Suga declared emergency for the prefecture of Tokyo due to rising cases of Covid-19.The decision had been widely expected, as new infections in the Tokyo prefecture have been rising for nearly a month and hit their highest level since mid-May on Wednesday. Japan has been slow to vaccinate its population so far, with barely a quarter of the population receiving even one jab.
The European Central Bank set a new inflation target on Thursday and claimed a role in fighting climate change after a strategy review that marks the biggest overhaul to date of Europe's most powerful financial institution. The central bank for the 19 countries that use the euro currency has picked up an array of roles over the years, from bank supervision to payment infrastructure, especially in the wake of the bloc's debt crisis a decade ago.
Its first strategy review since 2003 was long overdue and ECB chief Christine Lagarde made it a key priority when she took over from Mario Draghi in late 2019. The project had been scheduled to take a year but was stretched to 18 months as policymakers focused on responding to the COVID-19 pandemic. In a decision flagged by policymakers, the ECB set its inflation target at 2% in the medium term, ditching a previous formulation for "below but close to 2%," which had created the impression it worried more about price growth above the target than below it.
U.S. claims are expected to have fallen to a new post-pandemic low of 350,000, from 364,000 last week. The numbers are due for release at 8:30 AM ET. They come a day after the Labor Department’s monthly for May showed that layoffs had already reached a record low as a newly-reopened service sector scrambled for workers.
USA Key Point
- ECB sets inflation target at 2% after strategy review.
- Treasury yields fall further as the unrelenting bid in bonds continue.
- BOJ reportedly expected to cut growth forecast for the year as virus restrictions dampen outlook.
Similar
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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This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
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.
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