Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Risk mood keeps slightly firmer to start the US session
Information is not investment advice
Ichimoku Kinko Hyo
CAD/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
XAU/USD: Despite the rally of silver, gold is trading above 50% retracement area
US Market View
World stocks steadied, Treasury yields bounced and the dollar held firm on Friday as markets took a cautious breather in the face of new concerns about the pace of the economic recovery from COVID-19. Markets have been roiled this week as a rise in cases of the Delta coronavirus variant crimped risk appetite and led to a flight to safety, with some betting the post-pandemic reflation trade had stalled and secular stagnation was back on the agenda. The Dow and S&P 500 futures rose on Friday as energy and banking shares rebounded from a sharp selloff that was triggered by growth worries and has put the indexes on track for their biggest weekly fall since mid-June.
China’s central bank cut the amount of cash most banks must hold in reserve in order to boost lending in the economy as growth starts to wane. The People’s Bank of China will reduce the reserve requirement ratio by 0.5 percentage point for most banks, according to a statement published Friday. That will unleash about 1 trillion yuan ($154 billion) of long-term liquidity into the economy, the central bank said. The last time the bank cut the main ratios was during the first wave of the pandemic in 2020, when it was trying to boost the economy after lockdowns to contain the Covid-19 outbreak. This reduction was signaled earlier this week, when the State Council, China’s equivalent of a cabinet, hinted the central bank would make more liquidity available to banks so they could lend to smaller firms hurt by rising costs.
G20 countries are responsible for 80% of the world's carbon emissions and need to take concrete action now, but there are different paths to achieve this besides explicit carbon pricing, U.S. Treasury Secretary Janet Yellen said on Friday. Yellen said in remarks to a G20 climate tax forum in Venice, Italy, that member countries will need to make significant public and private investments and make "difficult economic decisions" to achieve goals of decarbonizing their economies by mid-century.
Oil prices appear to have found a floor, pushing higher for a second straight session on Friday following inventory data. However, the rise was insufficient to make up for lost ground earlier in the week and oil is set to book its first weekly loss in six weeks. Gold enjoyed a good bout of volatility in the previous session, pushing to a three-week high of USD1818 before retreating to close approximately flat just above the key USD1800.
Concerns over slowing global economic growth, coupled with fears over Covid flareups, particularly in Europe and Asia, boosted safe-haven flows into the precious metal. However, these weren’t sufficient for gold to maintain the recent high.
USA Key Point
- BOE's Bailey says expects productivity benefits of digitalisation of economy will continu
- The EU and Asian markets squat down, but no real chance of monetary tightenin
- AUD/USD trades to session highs as risk sentiment keeps more positive so far toda
- ECB's Weidmann: We are not aiming for inflation either above or below 2% targe
- Heads up: ECB president Lagarde, BOE governor Bailey to speak later in the da
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.