Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
US Dollar keeps steadier after a mixed NFP report
Information is not investment advice
Ichimoku Kinko Hyo
CHF/JPY: The pair is trading below the cloud. Further bearish pressure will lead the currency pair to retest the previous lows.
XAU/USD: Gold moves closer to 50% retracement area. Seems that bullish momentum gains momentum recently.
European Market View
European stock markets are seen opening marginally lower Monday, with investors keeping a wary eye on the oil market following signs that China’s economic recovery may be slowing. Earlier Monday, a private survey showed China’s services sector grew in June at its slowest pace in 14 months, with the index coming in at 50.3, the lowest since April 2020. This, following on from Thursday’s manufacturing equivalent figure also falling in June, suggested that the recovery in the world’s second-largest economy from the Covid-19 pandemic is starting to abate. Elsewhere, the market will be waiting for news from Vienna with a group of major oil producers set to reconvene talks aimed at finalizing output levels for the rest of the year and beyond.
The dollar took a breather on Monday, after recent gains ran into a speed bump when details of last week's U.S. jobs report soothed jitters about the timing of U.S. interest rate hikes. While the headline June job creation figure beat forecasts, unemployment ticked higher, workforce participation didn't budge and the pace of hourly earnings growth slowed - suggesting rate rises could be further away than markets have come to fear.
Bank of Japan Governor Haruhiko Kuroda on Monday reiterated the central bank's readiness to ease monetary policy further if needed, with a close eye on the coronavirus pandemic's impact on the economy.Kuroda said economic activity will remain below pre-pandemic levels for the time being as curbs to prevent the spread of the virus weigh on service industries. But he said the world's third-largest economy will likely recover as the pandemic's impact subsides, with solid export demand underpinning corporate profits and capital expenditure.
Gold was up on Monday morning in Asia, boosted by a weakening dollar. The latest U.S. jobs report also calmed investor fears of an earlier-than-expected interest rate hike.
EU Key Point
- OPEC+ meeting said to still be scheduled to start at 1300 GMT later toda
- BOJ maintains assessment for 5 of 9 Japanese regions in latest economic report.
- ECB President Christine Lagarde will be speaking Monday 5 July 2021 Europe time.
- China Caixin/Markit PMI for June Services 50.3 (vs. expected 55.7).
- Australia Retail Sales for May +0.4% m/m (prior +1.3%)
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.
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.