Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
Swiss National Bank Supports that Negative Rates are Necessary
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The pair is trading in a bearish sentiment below the cloud. The currency pair has just surpassed the Kijun-sen and the Tenkan-sen, confirming a bearish momentum.
XAG/USD: Silver stands on 23.6% retracement area and continues to be a bullish trend.
EU Market View
European stock markets are seen opening mixed Tuesday, with investors having to sift through the conflicting impulses of strong Chinese export data and a setback in the progress towards a Covid-19 vaccine. Looking ahead, highlights from the macroeconomic calendar include German CPI (Final) and ZEW, UK Unemployment, US CPI, Fed Discount Rate Minutes, Apple Event, EU Ministers on Brexit, and Amazon Prime Day. Earlier Tuesday, official data showed that China's exports grew at a slightly faster rate in September, up 9.9% on the year last month, compared with a 9.5% increase in August. This marks a fourth straight month of gains, suggesting that a global economic recovery is underway.
European economic news was less impressive, with German consumer prices falling in September, confirming preliminary data, and the UK unemployment rate climbing to 4.5% in August, higher than expected.
EU Key Point
- ECB sources said several policymakers are reluctant to follow the Fed's Average Inflation targeting
- SNB's Jordan supports that we are not big fans of negative interest rates, but it is necessary
- Trump says that will spend more money if campaign spending is not enough
- Japan's Aso says G7 finance ministers will meet later Tuesday, issue a statement
- China September exports comes at +8.7% y/y (vs. +10.5% expected)
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.
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?