Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
The big picture remains ultra-bearish for US Dollar
Information is not investment advice
Ichimoku Kinko Hyo
GBP/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 continuous to stand below a full time retracement area. Bullish pressure is growing during the last days.
EU Market View
Asian equity markets kick off the week with tentative gains as the region takes its opportunity to react to last Friday's US jobs data disappointment and ramifications for Fed policy. US equity futures are stable at the reopen and remain near last Friday's records after the NFP miss supported the case for continued accommodation, while gasoline futures surge following the cyberattack which shut the Colonial Pipeline. European stock markets traded in a mixed fashion Monday, with the heavyweight miners helping the U.K. market outperform after Friday’s disappointing U.S. employment report kept the dollar weak and commodity prices strong. Friday’s U.S. employment report for April came in well below expectations, with NFP only rising by 266,000 during the month, after robust private payrolls data from the ADP and weekly initial claims numbers had lifted expectations to a one million-pay rise.
Attention will now switch this week to inflation data, although the mantra from Fed policymakers that the increase is due to temporary factors will carry extra weight following the jobs data. Wednesday sees the release of consumer price index figures for April, with the CPI number seen rising 3.6% on the year, a sharp rise from March’s 2.6%, and considerably above the 2% level the Fed usually seeks to limit price rises to.
The dollar edged lower in early European trade Monday, continuing its weakness after falling to a two-month low on the back of Friday’s disappointing U.S. jobs report, which pointed to the ultra-low interest rate policy staying in place for some time.
Calls grew for India to impose a nationwide lockdown as new coronavirus cases and deaths held close to record highs on Monday, increasing pressure on the government of Prime Minister Narendra Modi. The 366,161 new infections and 3,754 deaths reported by the health ministry were off a little from recent peaks, taking India's tally to 22.66 million with 246,116 deaths.
EU Key Point
- Cable gains to fresh highs since late February as buyers keep break above 1.4000.
- UK April Halifax house prices +1.4% vs +1.1% m/m prior.
- UK PM Johnson to make a statement later today on further reopening.
- ECB's Lane: Eurozone economy to return to 2019 levels in spring 2022.
- South Korea aims for 4% GDP growth this year, will spend more to ensure jobs are added.
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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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.
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