Equity markets climbed in Europe yesterday
Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD/CAD: touches three-year low before FOMC
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.
Fibonacci Levels
XAG/USD: Silver continuous to stand below 38.2% retracement area. Bearish pressure is growing, and bulls seem weak to gain control.
EU Market View
European stock markets are seen opening lower Wednesday, on mounting Covid concerns ahead of the outcome of the Federal Reserve’s two-day policy meeting. French health authorities reported 29,975 new cases on Tuesday, a 4.5% jump versus last Tuesday's total and the sharpest week-on-week rise in a month and a half.
Global markets have been knocked in recent weeks by a rout in Treasuries that saw the benchmark yield soar to a more than one-year high as bond investors bet accelerating COVID-19 vaccinations and massive fiscal stimulus would spur faster-than-expected growth and inflation in the world's biggest economy.
The U.S. central bank is scheduled to release new economic and interest rate forecasts and is likely to acknowledge stronger growth in 2021. With the Biden administration’s $1.9 trillion stimulus package yet to have its impact, the market is beginning to anticipate interest rates rising sooner than in 2024, as the central bank’s current guidance suggests. The central bank is expected to keep rates unchanged and its $120 billion pace of monthly bond purchases on hold. An update from the Powell, however, has the potential to trigger a move in bond yields that would likely move stocks. Expect Powell to refuse a talk of policy tightening because of the large amount of labour market slack. U.S. bond yields and the USD could jump if the FOMC’s post‑meeting statement and Powell’s statement are not deemed dovish enough.
EU Key Point
- Germany reports 13,435 new coronavirus cases, 249 deaths in latest update today.
- Japan will raise tariffs on US beef imports for 30 days.
- South Korea says there is no reason to stop using the AstraZeneca coronavirus vaccine.
- The latest International Atomic Energy Agency report shows Iran edging closer to developing a nuclear weapon.
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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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