Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
USDCHF: snaps back higher to retest the key swing area
Information is not investment advice
Ichimoku Kinko Hyo
CHF/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 on 23.6% retracement area. Gold continues to flirt with session lows.
US Market View
U.S. stocks are seen opening lower Tuesday, handing back some of the previous session’s gains ahead of keenly awaited testimony from Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen. Powell and Yellen will appear before the House Financial Services Committee later Tuesday, starting two days of congressial hearings aimed at assessing the economic policy response to the Covid-19 crisis. Financial markets have started to position for the Fed’s first interest rate hike coming before 2024, as the central bank guided towards at its last meeting, on the belief that the recently approved massive stimulus package. President Joe Biden will be briefed by advisers this week on infrastructure, climate and jobs proposals being considered by the White House that could collectively cost as much as $4 trillion, according to people familiar with discussions.
Biden advisers are weighing a price tag of between $3 trillion and $4 trillion for new legislative action, including repairing the country's crumbling infrastructure and tackling climate change, one source said.
Tuesday marks the one-year anniversary of the market’s bottom caused by the coronavirus pandemic. Since then, both the S&P 500 and DJIA have advanced 80% and the Nasdaq Composite has gained just over 90%. Oil prices traded sharply lower Tuesday, the day after Germany, the largest consumer of crude in Europe, confirmed that it would be extending its mobility restrictions to combat the third wave of the virus currently hitting the continent.
USA Key Point
- The JPY is the strongest and the NZD is the weakest.
- US tax hike talk continues to percolate.
- Bank of Spain cuts economic outlook.
- Fed's Kaplan: Jury is out on whether we will see sustained price rises.
- NZD/JPY plunges by more than 2% as the kiwi freefalls, yen strengthens.
- Dollar continues to move from strength to strength so far on the session.
- Oil drops by nearly 4% on firmer dollar, softer risk tones.
- EUR/USD eases lower as the dollar holds firmer to start the session.
- BOJ announces to start buying ETFs tracking the Topix only from 1 April onwards.
- NZD/USD builds a bearish case for a dip to the 0.7000/05 zone.
- US: Philly Fed Nonmanufacturing Index jumps to 38.6 in March from 3.9.
- Fed's Kaplan: Reducing asset purchases is first step for removing accommodation.
- Fed's Kaplan: Expecting Fed to start raising rates in 2022.
- USD/CAD clings to gains above mid-1.2500s, looks to Powell/Yellen for fresh impetus.
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.