Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
US dollar gains slightly on range bound markets
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
XAG/USD: Seems that the bullish euphoria has passed away. Silver bears gain strength and stand above 50.0% retracement area.
EU Market View
Asian shares enjoyed a relief rally on Monday as record highs on Wall Street and policy easing in China helped calm some of the recent jitters on global growth, though plenty of potential pitfalls lay ahead this week. In the United States, inflation data could provide a scare ahead of testimony by Federal Reserve Chair Jerome Powell on Wednesday and Thursday, where markets will be hyper-sensitive to any talk of early tapering.
European stock markets are seen opening just lower Monday, with investors starting an event-packed week on a cautious note as they seek out fresh cues. European Central Bank President Lagarde said on Sunday that the central bank will update its guidance on monetary stimulus at its next meeting, and indicated that fresh policy might be introduced in 2022 to support the European economy to replace the current bond-buying program.Last week the ECB changed its stance on inflation, potentially allowing CPI to climb higher than its 2% goal if the circumstance dictates.
U.S. is scheduled to release key inflation data for June later this week, while Federal Reserve Chairman Jerome Powell is set to testify in front of Congress on Wednesday and Thursday, potentially providing clues on the central bank’s thinking over tapering. Additionally, China will release second-quarter GDP data on Thursday amid concerns they could disappoint given a sudden easing in monetary policy last week. The number of Covid-19 cases continues to rise in large parts of Asia, while the U.S. had the most cases since mid-May as the delta variant spreads in less vaccinated parts of the nation.
Oil prices edged lower Monday amid uncertainty within the sector given the rising Covid-19 cases globally and the lack of agreement at the last meeting of the Organization of the Petroleum Exporting Countries and their allies over production levels.
EU Key Point
- Germany June wholesale price index +1.5% vs +1.7% m/m prio
- HSBC are looking for a bottoming out USD in coming month
- JP Morgan expect the Sydney lockdown to drag on economic activity, especially in the current quarte
- Kiwibank says November 2021 is too early for an RBNZ rate hik
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?