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.
A United Nations agency is warning that the central bank’s actions create a high risk of pushing the global economy into recession.
Inflation in New Zealand is the highest since 1990, edging to 7.3% in Q2 2022. The currency is under heavy pressure as the Reserve Bank of New Zealand is trying to reverse the inflationary spiral. The week ahead will give us a valuable clue about the country’s monetary policy, and we are here to talk about that.
In the middle of September 2022, the Canadian dollar has fallen to a 2-year low against the USD.