Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
S&P500, Dow and NASDAQ all up 1%
Information is not investment advice
Ichimoku Kinko Hyo
AUD/JPY: The AUD/JPY pair is now testing the previous top. Further bullish momentum will lead the market to reach fresh highs. A reversal back would push the currency pair to find support at the cloud.
European Market View
The central bank week continues today with policy announcements from Norges Bank and the Bank of England. We expect Norges Bank to raise its policy rate by 25bp to 0.25% and say that it will "most likely" hike again in December.
Concerns over a possible default of Evergrande have eased on tentative signs that an orderly restructuring might take place. Chinese shares have increased around 1% in Hong Kong overnight. Still waiting for news on the USD83.5m of interest payments on a dollar bond. Yesterday, Evergrande announced an agreement had been made with bond holders of domestic bonds on a separate payment due today.
Yesterday the Fed announced that tapering "may soon be warranted" and that it expects tapering to be concluded in mid-2022.
In the equities space, markets were too busy rebounding, as they shrugged off the FOMC decision. US struggled somewhat to find its direction in the last hour of trading, but judging by the initial reaction Fed's hawkish tilt was well received. Risk on also evident in relative sector performance, with value and cyclicals. Energy, banks and tech were among the sector favourites. Meanwhile, healthcare and utilities trailed. S&P500, Dow and NASDAQ all up 1%. VIX lower for a second day, and now slightly below the 25 mark. Optimism continues in Asia this morning with markets up in the 1%-range. US futures all in green.
In the FX space, EUR/USD broke below 1.17 yesterday after the more hawkish-than-anticipated Fed message.
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…
Popular
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.
Choose your payment system
