Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD/JPY: Downtrend could extend to the 108.40 region
Information is not investment advice
Ichimoku Kinko Hyo
GBP/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAG/USD: Silver continuous to stand below 38.2% retracement area. Bulls have returned.
EU Market View
Asian equity markets traded cautiously after the mild tailwinds from the US; Chinese markets saw a choppy session. Global equity funds lured massive inflows in the week ended April 14, on optimism over a strong second quarter earnings, and a decline in U.S. yields due to tempered expectations about a rise in inflation levels. The U.S. Treasury yields dropped this week, helped by the release of U.S. consumer prices data which showed inflation was not rising wildly. The expectations of higher inflation levels due to massive stimulus measures lifted U.S. yields to a 13-month high in March.
The dollar headed for its worst back-to-back weekly drop this year amid an extended retreat in Treasury yields as investors increasingly bought into the Federal Reserve's insistence of keeping an accommodative policy stance for a while longer.
Oil prices extended gains on Friday and were on course for a weekly gain of about 7% with an improved oil demand outlook and strong economic recoveries in China and the United States offsetting concerns about spikes in COVID-19 infections.
A coronavirus variant with potentially worrying mutations that was first detected in India has been found in the UK, whilst testing accuracy has raised urgent concerns. Looking ahead, highlights include EZ CPI (Final), US University of Michigan (Prelim.), Fed's Kaplan, BoE's Cunliffe and earnings from Morgan Stanley
China's economic recovery quickened sharply in the first quarter from last year's deep coronavirus slump, propelled by stronger demand at home and abroad and continued government support for smaller firms. Gross domestic product (GDP) jumped 18.3% in the first quarter from a year earlier, official data showed on Friday. While that undershot the 19% forecast by economists in a Reuters poll, it was the fastest growth since quarterly records began in 1992 and up from 6.5% in the fourth quarter last year.
EU Key Point
- Treasury rally cools going into European morning trade.
- Germany reports 25,831 new coronavirus cases, 247 deaths in latest update today.
- Pfizer and Japan set to agree a vaccine supply deal.
- China March Industrial production +14.1% y/y (expected +18%) + retails sales & investment data.
- US is preparing for a third booster shot of coronavirus vaccines.
- Bank of Japan Governor Kuroda says 2% inflation target possible to achieve, but will take time.
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.