Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USD/JPY : trading at 8 month high
Information is not investment advice
Ichimoku Kinko Hyo
EUR/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAU/USD: Gold facing a further weakness the last hours and trading below 23.6% retracement area. The risk off tone does not help gold.
US Market View
U.S. stocks are seen opening mixed Friday, amid cautious trading after the previous session’s sharp drops as investors start to readjust their interest rate expectations. The furious rally in risk assets around the world is taking a well-earned breather on Friday, with emerging market FX, commodities and equities all following the U.S. lower in varying degrees after the spike in U.S. bond yields on Thursday. The 10 year bond yield itself is making an unconvincing recovery, having spiked as high as 1.60% in the wake of a weak Treasury bond auction on Thursday, where the ratio of bids to bonds on sale hit a record low.
From the United States to Germany and Australia, government borrowing costs on Friday were set to end February with their biggest monthly rises in years as expectations for a post-pandemic ignition of inflation gained a life of their own. Australia's 10-year bond yield and Britain's 30-year yields were set for their biggest monthly jump since the 2009 global financial crisis. Long-dated New Zealand yields were flirting with their biggest monthly surge since 1994.
The world's largest economies should continue their rescue and support measures for workers and companies in the COVID-19 pandemic as the recovery is taking longer than initially thought, German Finance Minister Olaf Scholz said on Friday.
USA Key Point
- BOJ purchases ETFs for the first time this month amid market routs.
- EUR/USD falls to lows for the day as dollar holds firmer on the session.
- Germany's Spahn supports that 4.5% of German population have received a first vaccination dose.
- ECB may need to add support if rise in yields hurt growth.
- AUD/USD extends fall towards 0.7800 as the risk jitters continue to reverberate.
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?