Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD/JPY at three months highs. Is it poised for an extended breakout?
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The pair is trading above the cloud. An upward pressure would lead the pair to exit further the cloud, confirming a bullish outlook.
XAU/USD: Gold bulls react recently and send price above 61.8% retracement area.
EU Market View
Stocks made a meandering start to the second half of 2021 on Thursday, dipping in Asia on worries about new coronavirus infections and fresh lockdowns, while bond markets were on edge and the dollar crept higher ahead of U.S. labour data. In China, equities cheered the centenary of the Communist Party with a small rise, but a nationalist address from President Xi Jinping in Tiananmen Square did little to soothe geopolitical nerves and the yuan weakened very slightly.
Data in Asia also painted a mixed picture, with Japanese manufacturers' mood at a two-and-a-half year high, but factory activity slowing down through the region - particularly in Vietnam and Malaysia - on a resurgent pandemic. In Asia, the likes of Australia, Indonesia, Malaysia and Thailand have introduced new curbs to battle Covid-19 outbreaks, while in Europe the tourist season has been disrupted as Spain, Portugal and Greece restrict British travelers, given the rising number of cases in the U.K. A French government advisor, Jean-Francois Delfraissy, said on Thursday that it is already "too late" to stop the variant spreading in France, but said that the wave of Covid cases that he expects from Delta won't be as severe as previous ones.
The dollar consolidated around multi-month highs against its major peers as traders await Friday’s key employment report for clues about future Federal Reserve policy. U.S. private payrolls beat expectations overnight, although they are an unreliable guide to Friday's broader indicators. The ADP report is a widely-watched precursor to Friday’s official U.S. NFP release, although the relationship between the two hasn't been as tight as usual since the pandemic began. But it is the official labor market report that carries more weight with the Fed. Economists polled by Reuters expect a gain of 700,000 jobs for June, up from 559,000 in May. But variation among the 63 estimates is big, ranging from 376,000 to more than a million.
EU Key Point
- Heads up: ECB president Lagarde due to speak at the top of the hour.
- Eurostoxx futures +0.4% in early European trading.
- Germany May retail sales +4.2% vs +5.0% m/m expected.
- EUR/USD falls through post-FOMC low as the dollar firms further on the week.
- Japan chief cabinet secretary Kato says weighing up an additional stimulus package.
- China Caixin/Markit Manufacturing PMI for June 51.3 (expected 51.8).
- Australia coronavirus - Sydney is struggling to dampen new case growth.
- Australian May month exports jump 6% vs 3% in April.
- UK Times government is planning quarantine-free travel for the double-vaccinated by July 26.
- Japan - Jibun Bank/Markit Manufacturing PMI (final) for June: 52.4 (prior 53.0).
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?