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GBP/USD Holds Steady Above 1.2700 Amid Muted USD Movement

GBP/JPY Drops Below Mid-191.00s Following BoJ’s Verbal Intervention

GBP/JPY Drops Below Mid-191.00s Following BoJ’s Verbal Intervention

During the early hours of the European session on Wednesday, the GBP/JPY currency pair exhibited a downward trend, trading around 191.30 and breaking its two-day streak of gains. This shift in momentum comes as the Japanese Yen (JPY) begins to regain some of its recently lost ground, a response triggered by a verbal intervention from Japanese financial authorities. The intervention’s timing is critical, coming right before the Good Friday holiday, a period often marked by heightened market caution and a predilection for safer assets.

The turn of events started with a statement from Japanese Finance Minister Shunichi Suzuki. On Wednesday, he emphasized that the Japanese government would not hesitate to take “decisive steps,” including potential interventions, to stabilize any excessive fluctuations in foreign exchange markets. This declaration spurred a quick reaction, bolstering the JPY notably against the British Pound Sterling (GBP). The market’s cautious sentiment, amplified by uncertainties surrounding the upcoming holiday, has also played a part in driving the flow towards safe-haven currencies like the JPY, albeit temporarily.

Concurrently, a key development came from the Bank of Japan (BoJ), where a policymaker hinted at continuing with the bank’s dovish stance. This intention to maintain accommodating monetary conditions could potentially limit the ascent of the JPY and provide a buffer to the downside movements of the GBP/JPY pair. BoJ Governor Kazuo Ueda, echoing this sentiment on Wednesday, stated, “Based on our current economic and price projections, accommodative financial conditions are expected to continue for the time being.”

In the United Kingdom, recent comments from Catherine Mann, a prominent hawkish figure at the Bank of England (BoE), have stirred the markets. Mann indicated that investors might be overestimating the likelihood of multiple interest rate cuts this year. The response in the money markets was immediate, with a notable uptick in bets for an easing of monetary policy at the BoE’s next decision, estimating a 20% probability of a rate cut.

Looking ahead, traders are gearing up for the release of the UK’s Gross Domestic Product (GDP) growth figures on Thursday. These are projected to show a contraction of 0.3% quarter-over-quarter in the fourth quarter. Should the data exceed expectations, indicating stronger GDP growth, the Pound Sterling (GBP) might find new vigor, potentially giving a boost to the GBP/JPY pair. Additionally, Friday will bring the Tokyo Consumer Price Index (CPI) for March into focus, an indicator that could further influence the currency pair’s dynamics. This confluence of economic releases and policy signals from Japan and the UK is setting the stage for a potentially volatile period for the GBP/JPY currency pair.

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EUR/USD Holds Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD Stays Near 1.0860 as Market Awaits Fed Chair Powell’s Speech

EUR/USD Stays Near 1.0860 as Market Awaits Fed Chair Powell’s Speech

During the early hours of Asian trading on Friday, the EUR/USD currency pair experienced a slight pullback, settling in the vicinity of 1.0860. This modest decline in the Euro against the US Dollar can be attributed to a strengthening US Dollar and an uptick in US Treasury bond yields. Market participants are keenly awaiting the German IFO Business Climate Index, which is due on Friday, in anticipation of insights from Fed Chair Jerome Powell’s upcoming speech.

The focus on the US Federal Reserve has intensified following its recent decision to maintain its benchmark overnight borrowing rate within the range of 5.25% to 5.5%. Fed Chairman Jerome Powell, in his address, refrained from specifying when rate cuts would be implemented. However, he signaled a likelihood of reducing interest rates before the year’s end. Market expectations, gauged by the CME FedWatch Tool, suggest there is an 80% probability that the Fed will initiate rate cuts as early as the June meeting.

Recent economic data from the United States have also played a crucial role in influencing market sentiment. The US S&P Global Composite PMI for March was reported at 52.2, slightly down from the previous 52.5. Meanwhile, the Manufacturing PMI exceeded market expectations by climbing to 52.5 in March from February’s 52.2, against a forecast of 51.7. However, the Services PMI fell short of expectations, coming in at 51.7 compared to the estimated 52.0 and February’s 52.3.

On the European front, Thursday’s Purchasing Managers Index survey by the HCOB revealed mixed signals. The Eurozone Manufacturing PMI dropped to 45.7 in March, underperforming against both the previous 46.5 and the expected 47.0. Contrarily, the Services PMI for March outpaced forecasts, registering at 51.1, an improvement from February’s 50.2 and surpassing the anticipated 50.5. The Composite PMI for the Eurozone marked a slight increase to 49.9, against the projected 49.7 and February’s reading of 46.3.

Looking forward, the trading community will closely monitor the German IFO Business Climate Index, along with speeches by Fed Chair Powell and Barr on Friday. The forthcoming week promises further significant data releases, including the German Retail Sales for February and the US Gross Domestic Product (GDP) figures for the fourth quarter (Q4). These forthcoming events are expected to provide clearer direction for the EUR/USD currency pair, as traders seek to gauge the broader economic landscape and its impact on currency markets.

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Focus Shifts to FOMC Minutes

GBP/JPY Stays Strong, Yet Below the 193.00 Level After UK CPI Data Release

GBP/JPY Stays Strong, Yet Below the 193.00 Level After UK CPI Data Release

During early Wednesday trading in Europe, the GBP/JPY pair maintained its strength, staying just below the 193.00 mark. The Pound Sterling remained resilient against the Japanese Yen despite the release of lower-than-expected UK CPI inflation data for February. Market focus is now turning towards the Bank of England’s (BoE) monetary policy meeting on Thursday, where no change in interest rates is anticipated. Currently, the GBP/JPY is trading at 192.80, marking a 0.47% increase for the day.

The UK’s Consumer Price Index for February, as reported by the Office for National Statistics, saw a month-over-month increase of 0.6%, recovering from a 0.6% decline previously but falling short of the projected 0.7% rise. Year-over-year, the CPI grew by 3.4%, slowing down from January’s 4.0% increase and not meeting the expected 3.6% growth.

This data is expected to influence the BoE’s upcoming decision on interest rates. With inflation showing signs of easing, the BoE, under Governor Andrew Bailey, is predicted to maintain its current interest rate of 5.25% for the fifth consecutive time. Bailey has previously stated the need for more evidence of inflation trending towards the 2% target before considering a rate cut.

Meanwhile, the Bank of Japan (BoJ) recently raised its interest rate by 10 basis points to 0%, the first hike since 2007. However, the BoJ offered no clear guidance on future policy, keeping financial conditions largely accommodative, which has placed some downward pressure on the Yen and supported the GBP/JPY pair.

Looking forward, market attention will soon shift to the release of Japan’s Merchandise Trade Balance for February and the Jibun Bank Manufacturing PMI for March, followed by the BoE’s interest rate decision on Thursday. These events are expected to provide clearer direction for the GBP/JPY movement.

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EUR/JPY Rises, Awaits BoJ Rate Decision Below Mid-162.00s

EUR/JPY Rises, Awaits BoJ Rate Decision Below Mid-162.00s

During the Asian trading session on Monday, the EUR/JPY currency pair exhibited a stronger performance, stabilizing below the mid-162.00s range. This market movement comes amidst growing investor speculation that the Bank of Japan (BoJ) might soon shift away from its long-standing ultra-dovish monetary policy. The anticipation is building towards the BoJ’s interest rate decision, which is scheduled for announcement on Tuesday. As of the latest update, the EUR/JPY is trading at 162.35, showing a marginal decline of 0.01% for the day.

This currency pair’s dynamics are also influenced by expectations surrounding the European Central Bank (ECB). Several ECB policymakers are foreseeing a potential interest rate cut at the June meeting. ECB President Christine Lagarde has hinted that the earliest possibility for a rate cut would be in June, following the central bank’s revision of inflation forecasts and its prediction of achieving a 2% inflation target by 2025. ECB Governing Council member Klaas Knot has suggested the likelihood of a rate cut in June and foresees a total of three reductions throughout the year. Another ECB policymaker, Yannis Stournaras, has proposed the possibility of a rate cut as early as July, followed by two additional cuts before the end of the year.

Conversely, there is a divergence of opinions among analysts regarding the timing of the BoJ’s potential interest rate increase, debating between March and April. Should the BoJ opt for a rate hike, it is anticipated to increase the rates by 20 basis points (bps) to 0.1%, a rise from the current -0.1%. The probability of the BoJ waiting until April for the rate hike is also being considered, with the market currently assigning a 39% chance of an increase at Tuesday’s meeting. Any cautious or dovish statements from Japanese policymakers could potentially exert downward pressure on the Japanese Yen (JPY), thereby benefiting the EUR/JPY pair.

In the upcoming week, market focus will shift to several key economic indicators. Investors will closely monitor the Eurozone Harmonized Index of Consumer Prices (HICP) and the Trade Balance data, both due on Monday. The spotlight will then turn to the BoJ’s interest rate decision on Tuesday, alongside the release of the ZEW Survey results from Germany and the Eurozone. These economic releases are expected to provide significant cues for traders, influencing trading strategies around the EUR/JPY cross.

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USD/CHF Gains Momentum Above 0.8550 Ahead of FOMC Minutes

USD/CHF Nears 0.8790 Amid Strong US Inflation

USD/CHF Nears 0.8790 Amid Strong US Inflation

The US Treasury Secretary, Janet Louise Yellen, recently expressed her views on the future of interest rates in the United States, stating that it is unlikely they will return to the pre-pandemic lows. This observation was made in the context of discussing the interest rate assumptions in President Biden’s budget plan, which Yellen found to be in line with a wide range of forecasts, thus endorsing their credibility and reasonableness.

In the meantime, the Swiss Franc (CHF) is facing a unique set of challenges. The Swiss National Bank (SNB) has revised its strategy, moving away from fostering a robust domestic currency. This shift comes at a time when there is a general risk-on sentiment in the market, which typically leads to a decrease in the appeal of traditionally safe currencies like the Swiss Franc. The impact of this sentiment is evident as it places downward pressure on the CHF.

Thomas Jordan, the Chairman of the SNB, has publicly addressed concerns about the Swiss Franc’s excessive strength, particularly noting the potential negative impacts on Swiss businesses and exporters. These concerns are supported by recent data from Switzerland’s Foreign Exchange Reserves (CHFER), which have shown signs of recovery, hinting at the SNB’s likely intervention in the currency market. The central bank is presumably selling Swiss Francs and buying foreign currencies in an effort to control the CHF’s appreciation.

Adding to the economic landscape, consumer confidence in Switzerland has been on a decline, as evidenced by recent figures. The consumer confidence indicator fell to -42.3 in February, slightly lower than January’s -41.1, indicating growing worries about personal finances and the broader economy over the coming months. This negative trend in consumer sentiment underscores the challenges facing the Swiss economy. Further insights into the economic situation in Switzerland are expected with the upcoming release of the Producer and Import Prices for February on Thursday. These data points will provide a more comprehensive view of the nation’s economic health and prospects.

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GBP/JPY Falls Close to 188.70 Amid Rumors of Bank of Japan Mulling Rate Increase in March

GBP/JPY Falls Close to 188.70 Amid Rumors of Bank of Japan Mulling Rate Increase in March

The GBP/JPY pair retraced its recent gains from Tuesday, declining to near 188.70 in the Asian trading session on Wednesday. This shift can be attributed to the strengthening of the Japanese Yen (JPY), spurred by market speculation about the Bank of Japan’s (BoJ) potential interest rate hike in March.

A key factor fueling these speculations is Japan’s spring wage negotiations, which have concluded with notable outcomes. Firms have agreed to the demands of Rengo, Japan’s largest trade union confederation, for pay increases of 5.85% this year. This marks a significant development, surpassing a 5.0% increase for the first time in three decades. The substantial rise in wages reflects not only the country’s economic recovery but also an effort to combat the long-standing issue of stagnation in wage growth.

Furthermore, Japan’s Chief Cabinet Secretary, Yoshimasa Hayashi, has publicly expressed his support for widespread wage hikes throughout the economy. This stance is indicative of the government’s commitment to ensuring sustainable economic growth and improved living standards for its citizens.

The recent release of higher-than-expected producer inflation data from Japan has also played a crucial role in reinforcing the belief that the BoJ might soon initiate a rate hike. This anticipation has provided a strong boost to the JPY, resulting in the observed depreciation of the GBP/JPY currency pair.

On the other side of the equation, the UK’s economic indicators have shown a slight downturn. UK Average Earnings Including Bonuses for November 2023 to January 2024 have eased to 5.6%, down from 5.8% in the previous period. Moreover, annual wage growth excluding bonuses has also seen a reduction, dropping to 6.1% from 6.2%. These figures have led to an increased likelihood of the Bank of England (BoE) implementing rate cuts this year, with market participants now anticipating three rate cuts.

The Pound Sterling (GBP) has been noted as one of the top performers among major currencies in recent times. Analysts at Commerzbank are closely monitoring the GBP’s trajectory, though there remains a degree of uncertainty about the sustainability of its strength. At present, the GBP’s robust performance appears to be on somewhat shaky ground, influenced by both domestic economic indicators and international market dynamics.

Overall, the GBP/JPY’s movement reflects a complex interplay of economic factors from both the UK and Japan, highlighting the sensitivity of currency pairs to domestic economic policies and international market sentiments. As traders and analysts watch these developments, the future direction of GBP/JPY remains subject to further economic data and central bank decisions in both countries.

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EUR/USD Holds Steady Ahead of ECB Lagarde’s Speech

EUR/USD Stabilizes Around 1.0950, Awaiting US Payroll Data

EUR/USD Stabilizes Around 1.0950, Awaiting US Payroll Data

The EUR/USD currency pair has been exhibiting a phase of consolidation, struggling to extend the upward trajectory it started on March 1st. This period of steadiness comes as traders and market analysts fix their attention on forthcoming key economic releases from both the Eurozone and the United States. Notably, the anticipation centers around the Eurozone’s Gross Domestic Product (GDP) figures and the Nonfarm Payrolls data from the US. In the midst of this expectancy, the EUR/USD pair has been seen fluctuating around the 1.0950 mark during the Asian trading session on Friday.

The upcoming GDP data for the Eurozone, adjusted for seasonal variations, is projected to mirror the previous quarter’s figures, with an annual growth rate steady at 0.1% and a monthly rate unchanged at 0.0% for Q4 of 2023. On the other side of the Atlantic, the spotlight is on the US labor market, with Nonfarm Payrolls anticipated to show the creation of around 200,000 new jobs in February, a decrease from the 353,000 reported in the previous month. This figure is being closely watched as it could fortify market speculations regarding a potential interest rate cut by the Federal Reserve (Fed) in June. Current estimates from the CME FedWatch Tool suggest there is a 56.7% likelihood of such a rate cut occurring in June.

The currency pair’s movements also come in the wake of the latest monetary policy decision by the European Central Bank (ECB). On Thursday, the ECB made the decision to keep its current policy unchanged, maintaining its dedication to guiding inflation back within its target range. The bank has left the interest rates on its main refinancing operations, the marginal lending facility, and the deposit facility at 4.5%, 4.75%, and 4.0% respectively. The ECB has reiterated its commitment to maintaining appropriately restrictive monetary measures for as long as necessary to bring inflation under control.

Additionally, the Fed Chair Jerome Powell, during his second day of testimony before the US Congress, hinted at the possibility of rate reductions later in the year. His remarks have sparked interest among market participants, who are keenly observing the Fed’s monetary policy direction amidst varying economic indicators. Alongside Powell’s comments, Cleveland Fed President Loretta Mester, speaking at a virtual event hosted by the European Economics and Financial Center, expressed concerns over the sustained nature of inflation. Mester indicated that if economic conditions evolve in line with current forecasts, there might be a window for interest rate cuts later in the year.

These diverse and significant economic indicators from both sides of the Atlantic are playing a pivotal role in shaping market expectations and influencing the EUR/USD pair’s movements. As traders and investors brace for these key data releases, the currency pair is likely to remain in focus, with its near-term trajectory hinging heavily on these economic reports and policy decisions from the major central banks.

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Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese Stocks Rally, but Global Funds Remain Skeptical

Chinese stocks have potentially reached their lowest point, yet there remains a significant hesitation among money managers to reengage fully with the market. The MSCI China Index has seen a 27% rise since its January low, primarily driven by a shift towards undervalued stocks. However, this increase in value hasn’t yet been backed by convincing Chinese corporate earnings, according to insights from Lombard Odier, Pictet Asset Management, and Fidelity International. Despite some optimistic views, such as those from abrdn plc emphasizing the importance of profit gains, the broader investment sentiment remains cautious.

At a glance, Chinese equities haven’t looked this appealing in some time, with major indices entering bull markets bolstered by supportive policies, and long-only funds ceasing to cut positions. However, persistent economic uncertainties and ongoing strategic tensions with the US have diminished the appeal of Chinese stocks as a staple in emerging-market portfolios. John Woods, Chief Investment Officer for Asia at Lombard Odier, notes that tactical plays on short-lived rallies are less preferred than a focus on earnings and fundamentals.

The recent rally, starting in April, took many by surprise, including analysts from Goldman Sachs Group Inc., who noted a widespread fear of missing out among traders. To date, Chinese stocks have regained about $2.5 trillion in market value, recuperating over one third of the losses from a historic downturn earlier this year. This recovery is partly due to a rotation from markets like the US, Japan, and India, where stocks are peaking, towards the relatively low valuations in China, marking the longest stretch of net purchases via Hong Kong trading links in a year.

David Mudd, founder and CIO of PegasusAsia, a hedge fund, predicts a continued shift towards Chinese tech firms from their US counterparts, setting the stage for potential divergences and intriguing trading pairs. The MSCI China Index currently trades at 10 times forward earnings, significantly below both its five-year average and the 20.6 times earnings of the S&P 500.

Nicholas Yeo, head of China equities at abrdn, describes the recent market surge as a technical rebound due to historically low valuations, emphasizing that its sustainability will hinge on forthcoming earnings reports. In contrast, John Lin from AllianceBernstein expresses skepticism, pointing out that the current earnings growth expectations for Chinese stocks, around 10%, may be overly optimistic without supporting corporate performance.As the earnings season progresses, companies within the MSCI China Index have reported a nearly 30% drop in net profits before exceptional items as of mid-May. The upcoming earnings reports from tech giants like Tencent Holdings Ltd. and Alibaba Group Holding Ltd. are highly anticipated, as they could be pivotal in determining the rally’s durability.

Additional momentum for the rally comes from signs of increased policy support in Beijing, especially measures aimed at addressing the stagnant property sector. Simultaneously, the persistent high policy rates in the US make Chinese stocks an attractive alternative, particularly in the tech sector. The Golden Dragon Index, which tracks US-listed Chinese firms, recently experienced a notable rise, fueled by robust quarterly results from Tencent Music Entertainment Group.

Despite the tempting market conditions, Luca Paolini from Pictet remains cautious, opting for tactical investments in China. Morgan Stanley’s strategists, including Laura Wang, advise against chasing the rally, although they recognize specific opportunities. As Beijing encourages companies to enhance dividends and buybacks, and incentivizes key industries like semiconductors, Chinese equities are gradually becoming attractive to value-focused investors, as noted by George Efstathopoulos from Fidelity. However, the critical determinant remains the improvement in consumer sentiment within China, a factor that is still considered fragile.

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Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong Attempts to Attract Saudi Investment to Revitalize Stock Market

Hong Kong is actively seeking investment from Saudi Arabia to help rejuvenate its stock market, which has been facing multiple challenges. The city, known for its role as a global financial hub, is collaborating with the Saudi Tadawul Group to host a conference aimed at attracting fresh stock listings and fund inflows. This comes at a crucial time when Hong Kong needs to bolster its financial status.

The upcoming forum is not only an opportunity for Hong Kong but also for Saudi company officials who are keen on increasing their exposure to Asian markets. According to industry analysts, there is a significant political push fostering closer relations between China, including Hong Kong, and Gulf countries. Chinese businesses have expressed a keen interest in the Middle East, looking for new investment avenues to explore in the region.

This strategic conference highlights Hong Kong Exchanges & Clearing Ltd.’s efforts to attract new investors as part of its broader strategy to diversify its investor base amid reduced interest from U.S. and European investors due to rising geopolitical tensions. 

Last month, the nation’s securities regulator announced initiatives to encourage more companies to launch initial public offerings (IPOs) in Hong Kong, amidst a challenging period marked by a slow Chinese economy and increasing tensions between Beijing and Washington. These factors have led to a decline in investor interest and a significant drop in funds raised through IPOs, reaching a low not seen since 2009.

Bonnie Chan, CEO of Hong Kong Exchanges & Clearing, remains optimistic about the resurgence of significant IPOs in the city, with 100 applications currently in the pipeline and more expected. The recent uptick in applications has provided a hopeful outlook for the market’s recovery.

On the other side, Saudi Arabia sees clear benefits in tightening relations with China. Under the kingdom’s Vision 2030 agenda, spearheaded by Crown Prince Mohammed bin Salman, Saudi Arabia aims to increase foreign ownership and enhance liquidity in its stock markets. The Saudi market has shown robust growth, with the market capitalization increasing by 11% over the past three years, contrasting sharply with Hong Kong’s 25% decline. The Riyadh stock exchange has consistently performed well, attracting significant foreign investment, particularly after its inclusion in MSCI Inc.’s emerging-markets equities benchmark in 2019.

Recently, Hong Kong introduced the CSOP Saudi Arabia ETF, the first such exchange-traded fund in Asia, allowing investors to tap into the Saudi market. Despite a strong start with backing from Saudi Arabia’s sovereign wealth fund, it has seen modest fund inflows. Efforts are underway to cross-list this ETF in Shanghai to enhance accessibility for Chinese investors, who are increasingly recognizing the investment potential in the Middle East.

Further strengthening the ties, Hong Kong and Saudi Arabia have commenced negotiations on an “investment promotion and protection agreement.” There are also plans to launch a Riyadh-based ETF that tracks Hong Kong stock indexes. These initiatives underline the enduring partnership and mutual financial interests between the two regions.

Hong Kong’s Chief Executive John Lee has also expressed aspirations to attract a dual listing from Saudi Aramco, the world’s top oil producer, in Hong Kong. While this remains a future possibility, it signifies the city’s ambition to enhance its stature as a leading financial exchange.

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Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian Stocks Rise Slightly as Hopes for Federal Reserve Action Boost Sentiment

Asian stock markets achieved modest gains on Tuesday, driven by rising optimism that the Federal Reserve may initiate interest rate cuts within the year. This sentiment mirrored the uptick on Wall Street, sparked by soft U.S. employment figures which fueled speculation about potential changes in Fed policy. The optimism extended across major Asian markets, particularly in Japan, Korea, and Australia, contributing to the longest streak of gains in the region since February.

In Japan, the Nikkei 225 surged by as much as 1.6% as Tokyo investors returned from a holiday, showing robust trading activity. However, markets in Hong Kong and Shanghai experienced fluctuations, alternating between losses and gains throughout the trading day. The Japanese yen weakened following comments from Japan’s top currency official, Masato Kanda, who indicated that there was no immediate need for government intervention in currency markets as long as they remained functional.

The global equity landscape has been positively influenced by adjustments in investor expectations regarding the Federal Reserve’s monetary policy, especially after the recent U.S. jobs data suggested a less robust labor market. Chinese stocks, in particular, saw an uplift from assurances by China’s leaders to introduce new measures aimed at addressing the lingering issues in the housing sector.

Investment analysts highlight Asia’s attractive prospects in terms of growth, earnings potential, and valuation compared to the U.S. According to Ray Sharma-Ong of abrdn Plc, Asian markets have historically outperformed during periods of Fed monetary easing, thanks to better growth dynamics and attractive currency yields.

In the bond markets, there has been a cautious but noticeable shift towards expecting Fed easing this year, influenced by signs of cooling in the U.S. labor market. The yield on U.S. 10-year Treasuries showed little change, mirroring a stable yield environment in Australia as well.

Statements from Federal Reserve officials have underscored this cautious approach. Thomas Barkin, President of the Fed Bank of Richmond, noted that sustained high interest rates are likely to further slow economic growth and help bring inflation down to the 2% target. His counterpart in New York, John Williams, mentioned that rate cuts are anticipated eventually, but the timing would hinge on a broader array of economic data.

Meanwhile, the Reserve Bank of Australia held interest rates steady at a 12-year peak, indicating it would take time before inflation consistently met its target range. In China, positive sentiments were further buoyed as Shenzhen and other major cities relaxed home buying restrictions, part of broader efforts to rejuvenate the struggling real estate sector.

Strategists at HSBC Holdings, including Herald van der Linde, suggest that Chinese markets are poised to remain attractive in the short term due to an undervalued yen, high investment in Japanese funds, and ongoing improvements in China’s regulatory and economic environment. They predict that any Fed easing in late 2024 would likely benefit mainland China more than Japan, pointing to a continued shift in regional market dynamics.

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Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Asian Stocks Rise Post-Fed Decision; Yen Declines Resume

Most Asian stocks rose following comments from Federal Reserve Chair Jerome Powell, which tempered expectations for further interest-rate hikes. Meanwhile, the yen weakened after briefly surging, indicating possible intervention.

In market movements, equity indexes in Australia and Hong Kong saw gains, while Japanese stocks remained stable. U.S. stock futures experienced a rally, contrasting with a dip in European contracts. Market focus now shifts to forthcoming economic indicators, including euro-area manufacturing data and Apple Inc.’s earnings report.

The yen’s decline by as much as 1.1% against the dollar, following a sharp rise in New York, suggests doubts about Japan’s ability to counter further weakening despite its significant interest-rate gap with the U.S. Japan’s chief currency officer, Masato Kanda, refrained from commenting on potential market interventions.

The Federal Reserve maintained the federal funds rate at 5.25% to 5.5%. Powell indicated that a rate hike is unlikely without clear signs that current policies are insufficient to achieve a 2% inflation target. This stance suggests a cautious approach towards monetary policy, aimed at managing persistent inflation pressures.

On the currency front, the Bloomberg dollar index fell for a second consecutive day, influenced by lower U.S. yields post-Fed announcement. The euro remained steady after a slight increase the previous day.

Corporate earnings also highlighted market dynamics. ArcelorMittal SA reported better-than-expected results, and Apple’s upcoming earnings will provide insights into its performance amid a slowdown in China.

John Woods of Lombard Odier commented on the resilience seen in earnings, emphasizing the predominance of U.S. narratives in the current market environment.

Additional economic insights are expected with the release of April’s non-farm payroll data, with forecasts suggesting a stable unemployment rate of 3.8%. This could indicate persistent robust hiring trends, potentially challenging the Fed’s moderation efforts.

In commodities, oil prices bounced back from prior losses driven by concerns over demand and high U.S. crude inventories. Gold prices increased, supported by the Fed’s indication of a potential shift towards reducing borrowing costs once confident in the easing of inflation.

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Japan Drives Asian Stocks Up, China PMI Steady

Japan Drives Asian Stocks Up, China PMI Steady

Asian stock markets saw gains on Tuesday, with Japan taking the lead, as recent Chinese economic data indicated sustained recovery in the world’s second-largest economy. Japanese and Hong Kong indices climbed, while Chinese mainland shares showed mixed responses after reports of continued growth in factory activities. Meanwhile, U.S. stock futures remained stable following a robust earnings kickoff on Wall Street, despite expectations of sustained high interest rates by the Federal Reserve.

In Japan, equities rose sharply after a national holiday, buoyed by a strong rebound in the yen from a 34-year low against the dollar, amid rumors of government intervention to stabilize the currency. The yen experienced significant volatility, swinging over 2% after a previous drop to 160.17 per dollar, marking the broadest range since late 2022. During Asian trading hours, the yen’s gains moderated slightly as the U.S. dollar strengthened.

Analysts note a cautious optimism surrounding the Japanese currency, as fears of its continued depreciation seem to have eased. Elsewhere in Asia, there’s speculation that China might consider a drastic step to boost its sluggish economy, such as a substantial devaluation of the yuan. Chinese markets are set to close later in the week for the Labor Day holidays.

On the corporate front, Samsung Electronics saw a notable increase in earnings, driven by profits in its semiconductor unit for the first time since 2022, highlighting the surge in global AI development. Shares of Sumitomo Corp. also soared following reports that Elliott Management Corp. had acquired a significant stake in the company. Meanwhile, HSBC announced a decline in its first-quarter pretax profit and the upcoming retirement of its CEO, Noel Quinn, sparking a search for his successor.

In the U.S., early earnings reports are surpassing expectations with a significant majority of companies outperforming initial estimates. This has led to an upward revision in expected earnings growth, boosting investor sentiment. U.S. Treasury yields stabilized after a slight drop, and bond yields in Australia and New Zealand fell.

Market analysts anticipate continued volatility in U.S. markets but remain optimistic, particularly for AI-driven sectors. They recommend a balanced investment approach, emphasizing the potential in U.S. equities, especially technology stocks.

In commodities, oil prices steadied after a notable drop, as peace talks in the Middle East lowered risk premiums. Gold is on track to rise for the third consecutive month, with investors closely watching the upcoming Federal Reserve meeting.

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Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple’s Market Lead in China Slips as Q1 Shipments Drop 6.6%

Apple has been dethroned as the leading smartphone seller in China during the first quarter of 2024, according to preliminary data released by research firm IDC on Thursday. The company saw its smartphone shipments decline by 6.6% compared to the same period last year, amidst fierce competition that has reshaped the market dynamics.

In a closely contested race for market dominance, both Honor and Huawei have now edged out Apple. Honor experienced a rise in market share to 17.1%, while Huawei closely followed with a 17% share. Apple’s market share, in contrast, has slipped to 15.6%. IDC identifies a statistical tie in market share when the difference between companies is 0.1% or less, underscoring just how tight the competition has become.

This shift comes despite Apple’s attempts to regain traction through price promotions during the quarter. Arthur Guo, a senior research analyst at IDC China, noted in the report that these efforts were insufficient to counter the robust challenge posed by Android-based competitors.

Adding to Apple’s challenges, the overall smartphone market in China is on the rise, with total shipments increasing by 6.5% to reach 69.3 million units, as reported by IDC. This growth suggests a recovering market where competition is becoming increasingly stiff.

Further emphasizing the scale of Apple’s current predicament, another research firm, Counterpoint, revealed that Apple’s smartphone shipments in China plummeted by 19% in the first quarter. This marks the company’s poorest performance since 2020, indicating significant hurdles in one of its key markets.

The increasing market share of rivals like Honor and Huawei is indicative of a broader trend where Chinese consumers are responding more favorably to domestic brands, which have been aggressively innovating and marketing their products. As these brands continue to capitalize on national sentiment and technological advancements, Apple faces the dual challenge of adjusting its strategy to regain lost ground and redefining its value proposition to appeal to Chinese consumers amidst a rapidly evolving smartphone landscape.

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UBS Upgrades Chinese Stocks to Overweight

UBS Upgrades Chinese Stocks to Overweight

UBS Group AG has upgraded its rating for a prominent Chinese stock index to overweight, indicating a renewed confidence in the market’s recovery prospects. This upgrade, described as a rare and optimistic move in 2024, reflects UBS’s positive stance on the financial health and earnings potential of China’s largest stocks.

In a detailed analysis released on Tuesday, UBS strategists, including Sunil Tirumalai, highlighted the robust earnings and solid fundamentals of these top companies. They pointed to a noticeable increase in consumer spending and a potential shift in household savings towards market investments as key drivers of this optimism.

The timing of UBS’s bullish outlook on the MSCI China Index coincides with the market showing signs of recovery from a prolonged downturn. The index, along with corporate performance, has begun to improve, buoyed by economic upturns and a tentative easing of corporate struggles. Despite this, the shadow of geopolitical strife and regulatory uncertainties continues to temper investor enthusiasm, preventing a full-scale commitment to this asset class.

Simultaneously, UBS has adjusted its views on other Asian markets, upgrading Hong Kong stocks to overweight while downgrading Taiwan and South Korea’s tech-centric markets to neutral. This shift reflects a broader strategy of divesting from highly valued tech stocks amid expectations of sustained high interest rates by the Federal Reserve.

Year-to-date, the MSCI China Index has risen over 13% from its January low, with similar gains seen in the Hang Seng Index. This growth comes after a cautious period among brokerages who were hesitant to amend their market forecasts following a volatile market phase post-2022’s aggressive rally.

Historically, UBS had moved Chinese stocks to a neutral stance in late 2023, mirroring actions by Morgan Stanley, as it awaited economic stabilization and policy interventions. Recent data, however, shows a rebound in the 12-month forward earnings estimate for the MSCI China Index by 1.7%, the first rise since a dip at 2022’s end.

This positive trend in Chinese equities is further supported by national policies aimed at stabilizing the market and enhancing corporate governance, as outlined in China’s recent “Nine-Point Guideline.” These initiatives are expected to foster better dividend practices and higher quality stock offerings.

Nonetheless, UBS warns that the looming US elections could escalate geopolitical tensions, posing a significant risk to the ongoing recovery in Chinese stocks. This backdrop of uncertainty makes the current market landscape both promising and precarious as investors navigate these complex dynamics.

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Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold Struggles Below $3,300 as Fed Rate Cut Hopes Dim Ahead of FOMC Minutes

Gold (XAU/USD) dipped to a one-and-a-half-week low near $3,284 during the Asian trading session on Wednesday, weighed down by a stronger US Dollar and rising Treasury yields. Investors are increasingly convinced that recent US tariff hikes may fuel inflation, prompting the Federal Reserve to keep interest rates elevated for longer. 

The firmer Greenback, bolstered by expectations of prolonged Fed tightening and a robust June jobs report, has dulled the appeal of non-yielding assets like gold. Benchmark 10-year US bond yields also climbed, adding further pressure on the precious metal. 

Market participants remain cautious amid ongoing concerns about the economic fallout from Donald Trump’s aggressive tariff proposals. On Tuesday, the former US President threatened to impose duties of up to 50% on copper and 200% on foreign pharmaceuticals, unsettling global markets. However, gold’s traditional safe-haven demand has yet to see significant support in response. 

Traders are now eyeing the release of the FOMC meeting minutes later today, hoping for clues on the Fed’s rate path. Although a July rate cut appears off the table, markets are still pricing in up to 50 basis points of easing by year-end, likely beginning in October. 

Technically, a break below the $3,300 level, coupled with resistance at the 100-period SMA on the 4-hour chart, signals further downside. Momentum indicators suggest gold could slide towards the next support at $3,270, with a deeper drop towards $3,248–$3,247 not ruled out. 

On the upside, recovery attempts may face initial resistance near $3,310 and stronger barriers around $3,326 and $3,340. A decisive move above $3,360 could open the door to a short-term rebound toward the $3,400 mark. 

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Gold Price Climbs Steadily

Gold Price Climbs Steadily, Eyes Record High Amid Trade War Concerns

Gold (XAU/USD) extends its intraday rally, reaching the $2,880 region during the Asian session on Monday. The gains come in response to US President Donald Trump’s plan to impose new 25% tariffs on all steel and aluminum imports, reigniting fears of a global trade war and driving demand for the safe-haven precious metal. Additionally, concerns that Trump’s protectionist policies could fuel inflation further bolster gold’s appeal as a hedge against rising prices.

Gold Supported by Trade War Fears, But Fed Policy Remains a Concern

Despite strong upside momentum, gold’s gains may face limitations due to the resilient US Dollar (USD) and expectations that the Federal Reserve (Fed) might delay further rate cuts. The strong US employment data released on Friday, coupled with inflationary concerns, has reinforced speculation that the Fed will maintain a cautious stance.

Overbought conditions on the daily chart could also deter traders from initiating fresh bullish positions, especially in the absence of key US economic data early in the week.

Trump’s Tariff Announcement Sparks Market Uncertainty

On Sunday, Trump reaffirmed plans to impose 25% tariffs on all steel and aluminum imports into the US, adding that his administration would match tariff rates imposed by other countries. These announcements have further fueled uncertainty and strengthened gold’s safe-haven appeal.

Meanwhile, geopolitical tensions remain elevated. Russian Deputy Foreign Minister Galuzin stated there are no satisfactory proposals for Ukraine peace talks, dismissing Western statements as mere rhetoric. US Vice President JD Vance is reportedly heading to Germany this week to outline US policy proposals.

Fed Policymakers Express Caution Amid Economic Uncertainty

The latest US Nonfarm Payrolls (NFP) report showed 143K jobs were added in January, falling short of the 170K estimate but offset by an unexpected dip in the Unemployment Rate to 4.0%. While the report provides mixed signals, it has reinforced the belief that the Fed will remain cautious regarding further monetary easing.

Several Fed officials have weighed in on economic policy:

  • Minneapolis Fed President Neel Kashkari stated he would consider supporting further rate cuts if inflation data remains favorable and the labor market stays strong.
  • Chicago Fed President Austan Goolsbee noted that inconsistent US government policies create economic uncertainty, making it difficult to assess inflation trends.
  • Fed Governor Adriana Kugler acknowledged steady US economic growth but warned that progress toward the 2% inflation target remains uneven and slow.

What’s Next for Gold?

A stronger US Dollar could act as a headwind for gold prices, limiting aggressive bullish momentum. Traders will closely monitor Fed Chair Jerome Powell’s semi-annual congressional testimony and the upcoming US consumer inflation figures for further market direction.

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Gold Price Rally Holds Strong, But Overbought Conditions Raise Caution

Gold Price Bulls Hold Firm, But Overbought Conditions Suggest Caution

Gold (XAU/USD) continues its upward trajectory through the Asian session on Wednesday, reaching a fresh all-time high near $2,858. Concerns about the economic impact of US President Donald Trump’s trade tariffs continue to drive demand for the safe-haven metal. Furthermore, predictions that the Federal Reserve (Fed) would continue its easing cycle, backed by signs of deteriorating momentum in the US labor market, are fuelling demand for the non-yielding yellow metal.

 

Meanwhile, the US dollar (USD) remains under pressure near its weekly low, with rising expectations of further Fed policy easing, offering an extra lift to gold prices. However, Trump’s decision to suspend tariffs on Canada and Mexico has contributed to a risk-on mentality, which may restrict future gains for XAU/USD. Furthermore, gold is entering overbought territory on the daily chart, implying a short-term consolidation or minor retreat before the advance begins. Traders are now waiting for significant U.S. data releases, such as the ADP private-sector employment report and the ISM Services PMI, for new market signals.

Gold Bulls Retain Control Amid US-China Trade Tensions

Despite the positive risk tone, a further escalation in U.S.-China trade tensions continues to lend support to the upward momentum in gold. In response to President Trump’s latest tariffs, China has imposed targeted duties on US imports, and the threat of a trade war between the world’s two biggest economies has seen gold reach an all-time high on Wednesday.

On the macroeconomic front, the Job Openings and Labor Turnover Survey (JOLTS) released Tuesday revealed a decline in U.S. job openings, dropping to 7.6 million in December from a previous 8.09 million. The data signals a cooling labor market, increasing the likelihood of additional Fed rate cuts. This has kept USD bulls on the defensive and further strengthened XAU/USD.

Trump’s decision to postpone the application of a 25% tax on Canadian and Mexican imports by 30 days has revived hopes that a global trade war can be avoided. However, this has done little to undermine the positive enthusiasm toward gold.

Market players will be keenly monitoring Wednesday’s U.S. economic data, such as the ISM Services PMI and the ADP employment report, which may cause short-term changes in gold prices. However, Friday’s highly anticipated Nonfarm Payrolls (NFP) report continues to be the main focus. Furthermore, any fresh information about trade tariffs is probably going to cause financial markets to become more volatile.

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WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

WTI Crude Oil Struggles Near $72.00, 100-Day SMA Holds as Key Support

West Texas Intermediate (WTI) crude oil prices fell from a one-week high on Tuesday, attracting sellers for the second straight session. The commodity trades at $72.00, barely above last week’s one-month low and close to the important 100-day Simple Moving Average (SMA) support. 

US Tariff Delay Weighs on Oil Prices

US President Donald Trump has announced a one-month suspension on newly imposed tariffs on imports from Canada and Mexico, easing worries about potential supply disruptions from two of the country’s main oil suppliers. This development put downward pressure on crude oil prices. Furthermore, fears of lower gasoline demand—driven by the larger economic impact of Trump’s trade policies—are contributing to gloomy sentiment in the oil market.

OPEC+ Stands Firm on Production Policy

Despite Trump’s calls for higher output to combat rising oil prices, the Organization of Petroleum Exporting Countries and its allies (OPEC+) have chosen to keep current production levels. This decision may give some support for crude oil prices, avoiding further losses in the near term.

Key Technical Levels to Watch

Traders will closely monitor the 100-day SMA, currently positioned near the $71.00 mark, which serves as a crucial support level. A decisive break below this threshold could trigger an extended pullback from the recent multi-month highs. Conversely, a bounce from this level may reinforce buying interest and help WTI recover from its recent slump.

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Gold Holds Below $2,800 Despite Intraday Recovery

Gold Price Trims Intraday Losses but Remains Below $2,800 Amid Stronger USD

The gold price (XAU/USD) recovers some of its losses following the strong Asian session sell-off but remains in negative territory, hovering around $2,785, down about 0.60% for the day. The recent rise in the US Dollar (USD), fueled by President Donald Trump’s decision to impose tariffs on Canada, Mexico, and China, has pushed the greenback closer to a two-year high, weighing on gold and dragging it away from its all-time high of $2,817, hit on Friday.

However, projections that the Federal Reserve (Fed) would lower interest rates twice by the end of 2025, combined with indications about probable economic disruptions from Trump’s trade policies, contribute to gold’s safe-haven appeal. The current risk-off mentality further shields the downside, so bearish traders should exercise caution ahead of this week’s key US macroeconomic data, which begins with today’s ISM Manufacturing PMI release.

Technical Outlook: Gold’s Uptrend Intact Despite Intraday Pullback

From a technical perspective, the intraday decline found support near the $2,772 resistance-turned-support level, which now serves as a pivotal point. A decisive break below this zone could trigger further selling pressure, exposing gold to the next key support levels:

 

  • $2,755 – Initial downside target
  • $2,740 – Intermediate support
  • $2,725-$2,720 – Strong demand zone
  • $2,700 – Psychological level, a break below which could accelerate losses

Conversely, immediate resistance is seen in the $2,790-$2,800 region, followed by the record high of $2,817. Notably, momentum indicators on the daily chart remain comfortably positive, indicating that gold has not yet reached overbought levels. This provides room for additional upward momentum, confirming the broader bullish trend that began with the December swing bottom.

If gold manages to sustain a move above $2,817, it could pave the way for fresh record highs, with bulls eyeing further gains amid ongoing market uncertainty.

Market Drivers to Watch

US Dollar Strength: The impact of Trump’s tariffs on global trade could continue supporting the USD, potentially weighing on gold.

Federal Reserve Policy: Expectations of rate cuts in 2025 remain a crucial factor for gold’s long-term trajectory.

US Economic Data: The upcoming ISM Manufacturing PMI and Nonfarm Payrolls (NFP) report later this week could trigger volatility in gold prices.

Risk Sentiment: Any escalation in geopolitical or economic tensions could further boost gold’s safe-haven demand.

Overall, while gold has retreated from its highs, the larger bullish trend remains intact, with technical signals suggesting further upward movement as long as critical support levels hold.

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WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

WTI Slips to $71.00 Amid Trade Tariff Concerns and Weak China Data

West Texas Intermediate (WTI) crude oil prices edge lower during Wednesday’s Asian session, erasing part of the previous day’s modest recovery from a nearly three-week low. The commodity trades near $71.00, down over 0.25% for the day, and remains vulnerable to further losses amid prevailing bearish sentiment.

Investor concerns persist over US President Donald Trump’s threat to impose trade tariffs on Canada, China, and Mexico by February 1, which could weigh on global fuel demand. Additionally, weak Chinese economic data adds to downward pressure. Official PMIs released on Monday highlighted continued weakness in the world’s second-largest economy and top crude importer, raising concerns over lower consumption.

Further pressure on oil prices comes from Trump’s energy policies, which include plans to ramp up US energy production and calls for the Organization of Petroleum Exporting Countries (OPEC) to increase output to drive prices lower.

With bearish fundamentals dominating, WTI remains susceptible to further downside risks in the near term.

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WTI Drops Toward

WTI Drops Toward $74.00 as Trump Pressures OPEC to Lower Oil Prices

West Texas Intermediate (WTI), the US crude oil benchmark, trades near $74.10 on Friday, continuing its downward trend after US President Donald Trump urged Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.

Uncertainty surrounding Trump’s proposed tariffs and energy policies adds to the pressure on WTI. Speaking at the World Economic Forum in Davos on Thursday, Trump announced plans to request Saudi Arabia and OPEC to lower oil prices, saying, “I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil.”

Expectations of increased US production under Trump’s administration further weigh on oil prices. Earlier this week, Trump declared a national energy emergency, leveraging his authority to expedite the approval of oil, gas, and electricity projects that would typically require years of permitting.

Meanwhile, US crude inventories declined for the ninth consecutive week. The US Energy Information Administration (EIA) reported a drop of 1.017 million barrels in crude oil stockpiles for the week ending January 17, following a 1.962 million-barrel decline in the prior week. Market expectations had forecast a larger decrease of 2.1 million barrels.

Oil traders will closely monitor developments surrounding Trump’s energy policies and tariff announcements. Additionally, attention will shift to the preliminary US S&P Global Purchasing Managers Index (PMI) for January, set for release later on Friday. A weaker-than-expected reading could pressure the US Dollar (USD), potentially offering some support to the USD-denominated WTI price.

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EUR/USD Price Forecast

EUR/USD Price Forecast: Consolidating Below 1.0500 Amid Multi-Week High

The EUR/USD currency pair is having a hard time continuing its recent winning streak, trading in a tight range just below the 1.0500 psychological mark during the Asian session on Monday. In spite of the consolidation, the pair is still close to its three-week high of Friday, buoyed by a weaker US Dollar (USD).

Technically, the pair‘s location above the 38.2% Fibonacci retracement level of the November-January bear run, combined with upbeat oscillators on the daily chart, indicates that the bullish momentum is still intact. This leaves room for a potential rally towards the 1.0545-1.0555 resistance area, which coincides with the 50% Fibonacci retracement level and the 100-day Exponential Moving Average (EMA).

A successful breach above this crucial barrier may set the stage for additional gains, with EUR/USD potentially challenging the 1.0600 level. A break above this level may propel the pair towards the December 2024 swing high of 1.0630, close to the 61.8% Fibonacci retracement level. Further bullish momentum may continue to drive the rebound from its more than two-year low in January.

To the contrary, however, the 38.2% Fibonacci level of 1.0465 acts as an instant support level. A resolute breach through this area can drive selling momentum faster, pulling the pair towards the 1.0400 round number and down further into the mid-1.0300s (23.6% Fibonacci level). Failure to hold these levels could shift the bias in favor of bearish traders, potentially exposing the 1.0200 handle.

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EUR/USD Eases Near

EUR/USD Eases Near 1.0300 Ahead of Lagarde’s Speech

The EUR/USD pair edges lower to approximately 1.0310 during the Asian session on Monday, weighed down by a stronger US Dollar (USD). Market participants are focused on the upcoming Eurozone Sentix Investor Confidence data for February and a speech by European Central Bank (ECB) President Christine Lagarde later in the day.

On Friday, former US President Donald Trump announced plans to introduce reciprocal tariffs on multiple countries by Tuesday or Wednesday, though he did not specify which ones. This move has heightened concerns about a global trade war, fueling demand for the safe-haven USD.

“The immediate concern might not be inflation, as counter-effects like a demand slowdown could come into play. However, the bigger issue is uncertainty and the shift toward a more protectionist world,” said Charu Chanana, Chief Investment Strategist at Saxo.

Meanwhile, the Euro faces pressure from growing expectations of further ECB rate cuts amid sluggish economic growth. ECB Governing Council member Boris Vujcic stated that the market’s anticipation of three rate cuts this year is reasonable. However, he emphasized that greater clarity on monetary policy direction may not emerge until early in the second quarter.

Traders will keep a close eye on US trade policies, especially Trump’s repeated threats against Europe. JPMorgan economist Nora Szentivanyi noted that the objectives, timing, and tariff rates remain unclear. Nonetheless, the European Commission has stated it would retaliate firmly against any tariffs imposed by the US.

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EUR/USD Holds Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD Struggles Below 1.0400 Ahead of Eurozone Retail Sales Data

EUR/USD is trading lower around 1.0390 in the Asian session on Thursday, extending losses following a two-day recovery. Investors remain wary ahead of the release of Eurozone Retail Sales data later today.

Market predictions suggest that Eurozone retail sales scaled by 1.9% year on year in December, up from the previous 1.2% increase. However, the monthly number is expected to fall by 0.1%, erasing the 0.1% increase reported in November.

The euro remains under pressure as market sentiment points to further monetary easing by the European Central Bank (ECB). Policymakers feel optimistic that inflation will steadily return to the ECB’s 2% objective, lessening the need for additional tightening.

Meanwhile, the US Dollar Index (DXY), which tracks the dollar against six major currencies, has stabilized at 107.70, restricting EUR/USD’s upside potential. The dollar’s resiliency comes after a three-day losing skid, which puts pressure on the pair.

On Thursday, Federal Reserve Vice Chair Philip Jefferson reiterated his desire for keeping existing interest rates, underlining that the Fed’s policy remained restrictive despite the 100-basis-point drop. Meanwhile, San Francisco Federal Reserve President Mary Daly emphasized the central bank’s cautious attitude in the face of prolonged economic uncertainties.

The dollar weakened on Wednesday following a disappointing US Services PMI reading. The ISM Services PMI dropped to 52.8 in January from a revised 54.0 in December, falling short of the market consensus of 54.3. Looking ahead, traders are watching Friday’s US Nonfarm Payrolls (NFP) report, which might influence the Federal Reserve’s next policy actions.

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EUR/USD Stuck in Range Near 1.0375-1.0380 as Bulls Struggle for Direction

EUR/USD Struggles for Clear Direction, Stays Range-Bound Near 1.0375-1.0380

The EUR/USD pair continues in consolidation mode, failing to build on its recent recovery from the 1.0200 region—the lowest level since January 13. After reaching a weekly high earlier on Wednesday, the pair is fluctuating within a narrow range around 1.0375-1.0380, showing little change for the day amid mixed market signals.

Tuesday’s Job Openings and Labor Turnover Survey (JOLTS) indicated a cooling U.S. labor market, reinforcing expectations of Federal Reserve (Fed) policy easing. Markets are now factoring in the likelihood of two rate cuts by the Fed this year. Risk-on sentiment also remains prevalent, but should continue to weigh on demand for the safe-haven USD, and thereby support EUR/USD.

Upside momentum, however remains constrained by issues on the introduction of U.S. tariffs over the goods to be imported in Europe under Trump’s administration, among others, and the ECB dovish direction which is being felt in restraining the Euro though HICP was reported higher to an annual rate of 2.5% in the last month, still, does not allow much upside in this pair.

Looking ahead, market participants will focus on the final Eurozone Services PMI release, while the U.S. economic calendar highlights the ADP private-sector employment report and the ISM Services PMI. Movements in the USD could also be influenced by key FOMC member speeches. Still, Friday’s NFP report will focus more attention on it as it will help deliver a better picture of the situation in the U.S. labor market and set the direction for future Fed policy.

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GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD Holds Above 1.2400 as Markets Watch China Tariff Developments

GBP/USD extends its gains for a second consecutive session, trading around 1.2430 during Asian market hours on Tuesday. With  the  decision   by   U.S. President Donald Trump   to pause tariffs on Mexico and Canada , the pair benefits from a risk-on sentiment .

Despite this, investors continue to pay close attention to ongoing trade negotiations, making market volatility a major concern. Trump declared that he would postpone imposing high tariffs on Canada and Mexico for at least 30 days following their agreements to send 10,000 troops to the U.S. border to fight drug trafficking.

This move follows Trump’s recent decision to impose 25% tariffs on Mexican and Canadian goods, along with a 10% tariff on Chinese imports. Additional tariffs on China are anticipated to go into effect Tuesday at 5:00 GMT. Trump managed to say that talks with Chinese officials might happen “probably over the next 24 hours,” and that tariffs on China would be “very, very substantial” if an agreement could not be made.

Meanwhile, the U.S. Dollar Index (DXY), which tracks the USD against six major currencies, hovers around 108.70 after erasing most of its gains from the previous session. Strong U.S. economic data could provide support for the greenback, as the ISM Manufacturing PMI climbed to 50.9 in January from 49.3 in December, surpassing the expected 49.8.

While GBP/USD may rise, the British Pound’s upside may be limited, given the expectation that the Bank of England (BoE) will cut interest rates once again. Despite rising wages in the UK, the BoE is expected to lower interest rates by 25 basis points to 4.5% on Thursday.

The BoE’s Monetary Policy Committee (MPC) is expected to vote 8-1 in favor of the rate cut, with one member likely advocating for maintaining rates at their current level for now.

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EUR/USD Drops to 1.0200 on Trump’s Trade Tariffs

EUR/USD Slumps to Multi-Week Low Near 1.0200 Amid Trump’s Trade Tariffs

The EUR/USD pair extends its decline on Monday, plunging to the 1.0200 region—a three-week low—during the early Asian session. This drop brings the pair closer to its lowest level in over two years, last seen in January, reinforcing the ongoing multi-month downtrend.

The US Dollar (USD) gains broad strength following President Donald Trump’s weekend announcement of new tariffs: 25% duties on imports from Canada and Mexico, along with an additional 10% tariff on Chinese goods. These measures escalate global trade tensions, dampening investor appetite for riskier assets and boosting demand for the safe-haven USD. As a result, the EUR/USD pair faces renewed selling pressure.

Adding to the bearish sentiment, Trump also declared on Friday evening that he would impose tariffs on goods from the European Union. This, coupled with the European Central Bank’s (ECB) dovish stance, further weighs on the euro. Last Thursday, the ECB cut borrowing costs by 25 basis points (bps) as expected and signaled the possibility of additional rate cuts before the year’s end, exacerbating the euro’s weakness.

The policy divergence between the ECB and the Federal Reserve (Fed) further tilts market sentiment in favor of the USD. While the Fed has opted for a hawkish pause, supporting the dollar’s strength, a recent pullback in US Treasury yields may limit further USD gains and offer some relief to the EUR/USD pair. However, the overall market outlook suggests that the pair’s downside momentum is likely to persist.

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EUR/USD Holds Above 1.0400 | Focus on Q4 GDP & ECB Policy Decision

EUR/USD Holds Above 1.0400 Ahead of Q4 GDP Data and ECB Policy Decision

The EUR/USD pair is edging higher after three consecutive losses, trading near 1.0420 during Thursday’s Asian session. The rebound is primarily driven by a technical pullback in the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), which tracks the greenback against six major currencies, remains just below 108.00.

Despite the recent uptick, further gains for EUR/USD may be capped as the USD could regain strength following the Federal Reserve’s (Fed) cautious approach to monetary policy. The Fed reinforced its hawkish stance by removing language suggesting confidence in inflation reaching its 2% target.

During his press conference, Fed Chair Jerome Powell emphasized that any policy changes would require “real progress on inflation or some weakness in the labor market.” As expected, the Fed maintained its overnight borrowing rate at 4.25%-4.50% during its January meeting on Wednesday. This decision follows three consecutive rate cuts since September 2024, totaling a one-percentage-point reduction.

Meanwhile, the Euro faces downward pressure as the European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points in its policy meeting on Thursday, lowering the Deposit Rate to 2.75%. Market sentiment suggests that further rate cuts from the ECB may follow in the coming months, potentially weighing on the Euro.

Investors will closely watch the release of fourth-quarter Gross Domestic Product (GDP) data from the Eurozone and Germany on Thursday. Later in the day, focus will shift to the US Annualized GDP report, which could influence market sentiment and currency movements.

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US Dollar Stabilizes After Recent Losses

Dollar Weakens as Fed Hike Expectations Diminish

Dollar Weakens as Fed Hike Expectations Diminish

On Friday, the dollar witnessed a downturn, heading towards a weekly drop against multiple currencies. Market participants speculate that the U.S. Federal Reserve might have concluded its rate hikes, thus enhancing the risk sentiment. The dollar index, reflecting its value against six primary currencies, marked a decline of 0.122% at 106.07, closely tailing its one-week low from Thursday.

This marks its third dip in 16 weeks, anticipating a 0.4% decrease for the week. Recent market evaluations suggest a reduced likelihood of a rate hike in December, dropping to under 20% from a prior 39%, as per CME FedWatch’s data. This sentiment is influenced by the Federal Reserve’s decision on Wednesday to maintain the interest rates, albeit indicating potential hikes aligning with economic robustness.

Moh Siong Sim, a currency expert at the Bank of Singapore, pointed out the Fed’s precarious balancing act between the financial scenario and rate adjustments. He emphasized the rising bond yields’ role in this dynamic, suggesting the Federal Reserve can adopt a “wait and see” approach.

However, post the Fed’s policy announcement, there’s been over a 20 basis point reduction in the 10-year Treasury bonds’ yield. Notably, these Treasuries were not traded in Asia on Friday due to a Japanese holiday.

Sim stated the existing market tensions, though the prevailing mood leans towards relaxation. The employment data from Thursday revealed only a minor spike in the unemployment claims, indicating stability in the labor market. As attention pivots to the October non-farm payrolls, predictions are rife about an addition of 180,000 jobs. Any deviation from this could exert more pressure on the dollar.

Julien Lafargue, Barclays Private Bank’s chief market strategist, stated that even if the non-farm payrolls surpassed expectations, it might not solidify arguments for a December rate hike by the Fed. The central bank seems more driven by inflation than job growth.

Analysts believe the dollar’s trajectory will be influenced by upcoming economic data. According to Christopher Wong, a currency strategist at OCBC, for the dollar to soften, indicators need to show a stronger disinflationary trend and a noticeable relaxation in the U.S. job market. 

In related currency news, the euro and sterling are gearing up for weekly gains, while the Bank of England maintained its interest rates, highlighting no immediate reductions. The European Central Bank, on the other hand, paused after ten consecutive rate hikes, sparking debates on the duration of elevated rates. As for the yen, it made significant movements this week, causing traders to remain alert for possible interventions from Japan. The AUD and NZD also witnessed weekly surges, marking their best performance since July.

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Australian Dollar Steady Amid RBA’s Restrictive Policy Outlook

Australian Dollar Gains Momentum Amid Weakening US Dollar

Australian Dollar Gains Momentum Amid Weakening US Dollar

The Australian Dollar (AUD) continues its upward trajectory, marking its third consecutive day of gains on Monday. This rise comes after the AUD rebounded from its annual lows, primarily driven by the underperformance of the US Dollar (USD). The weakening of the USD is in response to the recent economic data that emerged from the United States last Friday.

Adding to the momentum is the anticipation surrounding the Reserve Bank of Australia (RBA). Speculation is rife that the RBA may consider raising policy rates in its next meeting scheduled for November 7. Such a move, if it comes to fruition, will undoubtedly influence the AUD’s trajectory further.

Significantly, Australia’s Retail Sales s.a. (MoM) data for September took analysts by surprise, showcasing a reading well above both market expectations and the previously recorded figures. This upswing in retail sales is a positive sign for the Australian economy and reflects robust consumer spending patterns. Moreover, the recently released data on Australia’s Consumer Price Index (CPI) highlights a growth trend. The third quarter of 2023 saw the CPI outpacing the increases recorded in the second quarter. With inflation on the rise, market experts foresee a strong possibility that the RBA might increase rates by 25 basis points in their forthcoming meeting.

On the international front, there’s a buzz in diplomatic corridors regarding a potential meeting between the Presidents of the US and China, Joe Biden and Xi Jinping, respectively. This meeting, slated for November, emerges after prolonged and meticulous diplomatic efforts to mend strained relations. If successful, the dialogue could pave the way for strengthened ties between the two superpowers. For the AUD, often influenced by commodity prices and global trade dynamics, this meeting bears significance. The upcoming release of China’s PMI data will likely be a focal point for investors, influencing trading strategies and decisions.

Meanwhile, the US Dollar Index (DXY) is making attempts to reclaim its lost position following recent setbacks. However, it faced challenges as data revealed a dip in the Core Personal Consumption Expenditures Price Index (YoY) for September. Although the month-on-month data indicated a predicted rise, the overall sentiment around the Greenback remains cautious. An additional factor to consider is the University of Michigan Consumer Index, which, despite surpassing expectations, didn’t provide a substantial boost to the USD. Given this scenario, market analysts predict the Federal Open Market Committee (FOMC) will maintain the status quo concerning interest rates in their imminent meeting.

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Australian Dollar Falters Amid Stronger US Dollar and Geopolitical Concerns

Australian Dollar Falters Amid Stronger US Dollar and Geopolitical Concerns

The Australian Dollar (AUD) finds itself under increasing pressure, with the currency marking its second consecutive day of losses against the US Dollar (USD) on Thursday. Lingering around its annual lows, the AUD/USD exchange rate is beleaguered due to a robust US Dollar buoyed by favorable US Treasury yields.

Recent inflation data from Australia have stirred discussions about the potential for a 25 basis points rate increment by the Reserve Bank of Australia (RBA) in their upcoming November session. Specifically, the Australian Bureau of Statistics (ABS) brought to light that the Consumer Price Index (CPI) witnessed a noticeable climb during the third quarter of 2023.

Providing insight into these inflationary movements, RBA Governor Michele Bullock spoke on Thursday, pointing out that the rise in the CPI was slightly above what had been forecasted. However, she was quick to note that these figures were still well within the expected boundaries set by the bank. Emphasizing the careful strategy of the central bank, Bullock outlined the RBA’s objective to delicately modulate the economy’s growth, ensuring it doesn’t inadvertently veer into a recession.

Meanwhile, in the United States, the US Dollar Index (DXY) is on an upward trajectory. This is largely attributed to the positive sentiment surrounding the US Treasury yields, further augmented by the impressive preliminary S&P Global PMI figures from the United States, which were made public on Tuesday. The strength of the US Dollar in recent times underscores the confidence investors have in the American economy and its fiscal instruments.

On the global stage, the specter of geopolitical tensions continues to loom large, likely driving investors towards safe-haven assets. In a notable development, Israel’s Prime Minister, Benjamin Netanyahu, has indicated the country’s preparedness to initiate a ground operation in Gaza. The specifics regarding the timing of such an action are expected to be arrived at through a collaborative decision-making process. Furthermore, in a bid to address the escalating tensions between Hamas and Israel, Iran’s Foreign Minister, Hossein Amir-Abdallahian, has reportedly initiated contact with the USA, as per sources from Iranian media.

In conclusion, while the Australian Dollar grapples with domestic economic indicators and rate hike prospects, it also has to navigate the challenging waters of a resurgent US Dollar and mounting geopolitical tensions that have global financial ramifications.

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Japanese Yen Continues Downward

Bank of Japan Initiates Unexpected Bond Purchase

Bank of Japan Initiates Unexpected Bond Purchase

In an unexpected maneuver, the Bank of Japan (BOJ) declared an unscheduled bond operation this Tuesday. This move comes in response to the escalating Japanese government bond (JGB) yields that recently touched their highest levels in a decade. By making this move, the BOJ intends to exert control and manage the sudden inflation of JGB yields, aiming to maintain financial stability within the country.

To provide a clearer perspective, the central bank of Japan, in this sudden operation, has put forth an offer to purchase bonds worth 300 billion yen (equivalent to $2.00 billion) that come with a maturity span ranging between five to ten years. Additionally, the bank has also shown interest in acquiring bonds valued at 100 billion yen, which possess maturities extending from 10 to 25 years. These purchases are slated to commence from Wednesday.

This initiative is over and above the BOJ’s regular proposition, wherein it pledges to procure an infinite quantity of JGBs daily, sticking to a fixed rate of 1%. This continual commitment from the bank underscores its dedication to economic steadiness and its proactive stance in dealing with unexpected market fluctuations.

The aftermath of the BOJ’s announcement was promptly visible in the financial markets. Specifically, the 10-year JGB yield, coded as JP10YTN=JBTC, witnessed a slight decline, moving 0.5 basis points down to 0.855%. Notably, prior to this adjustment, the yield remained steady at Monday’s closing rate of 0.86%, a peak not seen since the summer of 2013.

It’s worth noting the international influences that might be impacting Japanese yields. A remarkable surge in the U.S. Treasury yields has been observed, with the benchmark 10-year note, referred to as US10YT=RR, soaring to an impressive 5% overnight. This surge marked its pinnacle in the last 16 years, indicating substantial global financial shifts.

Furthermore, as a part of its comprehensive strategy, the BOJ has imposed a cap on the 10-year yield, limiting it to 1%. This falls under the bank’s yield curve controls (YCC) mechanism, which was surprisingly adjusted this past July. Even though the existing yield substantially trails this upper limit, it’s evident that the policymakers are vigilantly monitoring the situation. They have been consistently intervening to ensure that the rate of yield increments remains controlled and gradual.

In conclusion, as Japan’s economy encounters these yield challenges, all eyes are on the BOJ, anticipating its next policy decision, which is due to be unveiled on October 31st. This forthcoming announcement is expected to provide further insights into Japan’s economic trajectory and the central bank’s evolving strategies. 

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EUR/USD Eases Near

USD Index Hovers Uncertainly Near 106.50: Market Eyes Data and Powell’s Speech

USD Index Hovers Uncertainly Near 106.50: Market Eyes Data and Powell’s Speech

The U.S. Dollar Index (DXY), a measure that gauges the strength of the dollar against a basket of other currencies, exhibited a mix of gains and losses, stabilizing around the mid-106.00s this Thursday. Notably, the index has encountered a slight resistance approaching the 106.70 mark.

Following a noteworthy ascent on Wednesday, reaching near the 106.70 level, the index experienced some restrained selling pressures. This activity was influenced by fluctuating risk appetites in the market, especially as investors and traders exercised caution leading up to Federal Reserve Chairman Jerome Powell’s impending address.

Parallelly, U.S. yield trends have been heading upward, echoing the Federal Reserve’s consistent “tighter-for-longer” approach. This monetary policy perspective emphasizes a prolonged period of tight monetary conditions, reflecting confidence in the continuous robust performance of the U.S. economy.

As the trading session advances, all eyes are set to focus on Chairman Powell’s presentation at the prestigious Economic Club of New York. His commentary on the nation’s economic prospects is anticipated to have a significant impact on market movements. Simultaneously, several key figures from the Federal Open Market Committee (FOMC) and various regional Federal Reserve banks are slated to share their insights. This includes personalities such as FOMC’s P. Jefferson, Chicago Fed’s A. Goolsbee, Atlanta Fed’s R. Bostic, FOMC’s M. Barr, and Philadelphia Fed’s P. Harker. Each of their perspectives, representing a blend of centrist and hawkish views, will be meticulously analyzed by market participants.

On the data front, there’s a packed schedule. Initial weekly jobless claims are set to be unveiled, providing an updated pulse check on the labor market. This will be closely followed by indicators like the Philly Fed Manufacturing Index, offering insights into regional manufacturing activities. Other crucial reports encompass the CB Leading Index, statistics on Existing Home Sales, and the much-awaited Monthly Budget Statement.

In the broader context, the USD Index continues to oscillate near the 106.50 level, reflecting an air of uncertainty. Market stakeholders are meticulously evaluating the geopolitical landscape, crucial domestic data, and preparing for the potential market-moving remarks from Powell. 

Reassuringly, the U.S. dollar continues to derive strength from the nation’s economic vitality. The economy’s health, complemented by the Federal Reserve’s unwavering “tighter-for-longer” approach, sets the stage for intriguing dynamics in the currency markets in the days to come.

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GBP/USD Holds Steady Above 1.2700 Amid Muted USD Movement

UK’s Strong Inflation Data Pushes EUR/GBP Below 0.8680

UK’s Strong Inflation Data Pushes EUR/GBP Below 0.8680

During Wednesday’s early European trading session, the EUR/GBP currency pair experienced selling pressure, influenced largely by robust inflation data from the UK. This stronger-than-anticipated inflationary trend propelled the British Pound (GBP) upward, placing the EUR/GBP cross under some strain. Currently, the currency pair stands at around 0.8682, marking a modest 0.01% rise for the day.

The UK’s National Statistics released fresh data highlighting that September’s Consumer Price Index (CPI) increased by 0.5% month-on-month, up from August’s 0.3% and surpassing market predictions of 0.4%. When analyzed on a yearly basis, the inflation rate maintained its 6.7% pace, outpacing the forecasted 6.5%. Significantly, the Core CPI, which omits the often erratic food and energy prices, rose to 6.1% year-on-year in September, slightly down from its preceding 6.2% but better than the 6.0% market estimate. Such bullish data is fueling the GBP’s strength, which in turn is impacting the EUR/GBP cross’s trajectory.

Huw Pill, the Bank of England (BoE)’s Chief Economist, recently commented on the bank’s extensive work around interest rates. He stressed that if the UK economy faces sustained inflation, a long-term monetary policy response would be necessary. Supporting this viewpoint, BoE Governor Andrew Bailey hinted over the weekend that given the need for a tighter policy to bring inflation back to the 2% target, the current interest rate of 5.25% is likely to persist.

Concurrently, Christine Lagarde, the European Central Bank (ECB) President, emphasized the institution’s vigilance concerning inflation risks, particularly focusing on fluctuating oil prices and the Israel-Hamas conflict’s potential implications. Additionally, the ECB’s chief economist, Philip Lane, intimated that attaining the 2% inflation target might take longer than initially presumed, due to various contributing factors.

In related European economic news, Tuesday’s ZEW Economic Sentiment Survey for the EU recorded a 2.3 in October, a marked improvement from its previous decline of 8.9, thereby exceeding market projections. The German iteration of the survey also displayed positive momentum, registering at -1.1 compared to the earlier -11.4.

Moving forward, market watchers will keenly anticipate the final September figures for the Eurozone CPI and the August Construction Output data. Furthermore, upcoming remarks from ECB President Lagarde might provide insights into the ECB’s future monetary stance. By the week’s end, the spotlight will shift towards the UK’s Retail Sales data for September, which could provide definitive directional cues for the EUR/GBP cross.

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Nikkei Index Takes Lead in Asian Market Losses Amid Israel-Hamas Tensions

Nikkei Index Takes Lead in Asian Market Losses Amid Israel-Hamas Tensions

Amid rising geopolitical tensions between Israel and Hamas, Asian markets experienced a general decline in trading on Monday. The Nikkei index in Japan led the losses, with a focus on upcoming key inflation data due later in the week.

The escalating conflict in the Middle East has cast a shadow on regional stock markets. Israeli Prime Minister Benjamin Netanyahu’s announcement of military operations in Gaza to root out Hamas has generated uncertainty. US President Joe Biden has emphasized the need to protect civilians, and the US is working to alleviate shortages of essential supplies like food, water, and petroleum. Additionally, concerns have arisen due to robust US inflation data from the previous week, raising questions about potential rate hikes by the Federal Reserve (Fed).

As of the latest reports, the Shanghai Composite in China has slipped by 0.40% to 3,075, while the Shenzhen Component Index fell by 0.99% to 9,969. Hong Kong’s Hang Seng is down by 0.37% at 17,745, South Korea’s Kospi recorded a 1.24% dip, and Japan’s Nikkei has fallen by 1.80%.

The People’s Bank of China (PBOC) has maintained the one-year Medium-term Lending Facility (MLF) rate at 2.50% on Monday, alongside an unchanged seven-day reverse repo rate at 1.80%. PBoC Governor Pan Gongsheng, speaking at an International Monetary Fund meeting in Morocco, expressed a commitment to provide substantial support to the real economy.

In China, the National Bureau of Statistics reported the Chinese Consumer Price Index (CPI) for September at 0% YoY, down from the previous 0.1% and below market expectations of 0.2%. Additionally, the Producer Price Index (PPI) decreased to 2.5% from a 3% fall in August, missing the anticipated 2.4% decline. Investors are awaiting key Chinese economic data later in the week, including Gross Domestic Product (GDP) for the third quarter, Industrial Production, and Retail Sales, set for release on Wednesday.

In Japan, concerns about potential Fed interest rate hikes have weighed on the Japanese Yen (JPY). Market participants are approaching the upcoming release of Japan’s National Consumer Price Index for September with caution. Any signs of persistent inflation could encourage the Bank of Japan (BoJ) to tighten its monetary policy further.

Looking ahead, market focus will shift to US Retail Sales data scheduled for Tuesday. Subsequently, attention will turn to the release of Chinese Q3 growth figures, Industrial Production, and Retail Sales on Wednesday. Finally, Friday will bring the Japanese inflation data to the forefront of market analysis.

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US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

US Yields Boost Dollar, Weaken Yen

The dollar strengthened on Tuesday, driven by rising U.S. yields, putting pressure on low-yielding currencies like China’s yuan and Japan’s yen, which fell to its lowest level since 1986.

Benchmark 10-year Treasury yields increased nearly 14 basis points to 4.479% overnight. Analysts attributed this rise to expectations of Donald Trump winning the U.S. presidency, which could lead to higher tariffs and increased government borrowing.

As the dollar gained, the euro reversed part of a small rally following the first round of France’s election, which aligned with polling predictions. The euro last traded at $1.0735.

The yen dropped to 161.72 per dollar on Monday, its weakest in nearly 38 years, primarily due to the significant interest rate gap between the U.S. and Japan. On Tuesday, the yen traded at 161.55 per dollar in Asia and was under pressure from yen bears wary of potential intervention by Japanese authorities. The yen also hit a lifetime low of 173.67 against the euro on Monday and remained near that level on Tuesday.

In the bond market, the 10-year yield gap between U.S. and Japanese rates stood at 340 basis points, and nearly 440 basis points at the two-year tenor. China’s yuan, which reached a seven-month low against the dollar last week, faced similar pressure, with U.S. 10-year yields more than 220 basis points higher than Chinese government bond yields.

Robust manufacturing data in China and an announcement from the central bank about borrowing bonds, likely to sell them and stabilize falling yields, provided only a brief boost to the currency on Monday. The yuan last traded at 7.3043 in offshore markets on Tuesday, close to its June low.

The New Zealand dollar slipped 0.3% in early trade and was testing support at its 200-day moving average at $0.6075. The British pound remained steady at $1.2641. The Australian dollar hovered within its recent range at $0.6650, with traders focused on central bank minutes to gauge the likelihood of future interest rate hikes. Swaps market pricing suggests a one-in-three chance of a rate hike as soon as next month.

The question remains about the trigger for such a move. ING economist Rob Carnell noted that discussions have taken place, but the specific trigger for a hike is still uncertain. There is a leaning towards forecasting a hike at the August meeting.

Overall, the strengthening dollar and rising U.S. yields continue to exert pressure on low-yielding currencies, with markets closely watching upcoming central bank decisions and geopolitical developments.

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Cryptocurrency Move Back to Support the Pack to Level

If we have a look at the bearish start to the day in the majors and the Bitcoin move back to the level by $18,500 to the support pack. The Bitcoin to USD was seemed down at the level by 1.16% on this Thursday that reversing a 1.25% gain to the Wednesday to the ended the day at the level $18,260.0. At the start of the day, the Bitcoin rose to the early morning intraday to the high at the level before hitting the reverse level.

The major resistance level goes at the level by $18,878 and the Bitcoin fell to the intraday low to the level by $17,935.0.

The close term bullish pattern stayed flawless, disregarding the most recent pullback to sub-$18,000 levels. For the bears, Bitcoin would have to slide through the 62% FIB of $10,095 to shape a close term bearish pattern.

The Bitcoin was somewhere near at the level by 1.03% to $18,072.0. A blended beginning to the day saw Bitcoin ascend to an early morning high of $18,299.0 prior to tumbling to a low of $18,070.0.

Bitcoin left the significant help and obstruction levels untested from the get-go.

Somewhere else, it was a bearish beginning to the day for the majors. The Ripple’s XRP was somewhere around at the level 2.69% to lead the route down.

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Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

Bitcoin Slips Down Below at Level $13,000 Since the Last Rally

The Bitcoin seems to the low at the level of $9,813 in September that managed the bitcoin to reach at the level high at $13,868. The bitcoin price is rejected to the sequential indicators on the 3-day chart.

If we have a look at the current candlestick of the 3-day chart it will seem significantly bearish and the TD sequential indicators are presented a sell signal. The 50- SMA seems down at the level of $10,600 and the 100 SMA at the level of $9,47.

The In/Out of the Money Around Price chart shows the closest and most grounded help region to be somewhere in the range of the level at $12,687 and $13,073 with near 624,000 BTC in volume. A break below this point can drive the cost of Bitcoin down to $11,914.

Despite the fact that bears appear to have assumed responsibility for the present moment, the powerful day by day upswing stays unblemished for Bitcoin. The 50-SMA and the 100-SMA harmonize around $11,200 which will go about as a critical help level. The MACD keeps bullish and the most basic obstruction level is still at $13,863. A breakout over this point can without much of a range drive the lead digital currency towards the untouched high at the level of $20,000.

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Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price Clear the Path and Rose to the Level $13,000

Bitcoin Price of the bulls has been the full control of the market to the price at the level of $11,340 to $12,835. The cryptocurrency had the largest to the single day that put the gain. The MACD shows the increasing the bullish momentum to price the growth anticipated.

The position detector is a convenient little apparatus that causes us to imagine solid opposition and backing levels. According to the everyday conjunction detector, there is an absence of solid obstruction levels on the potential gain. This should be empowering news for the buyers as they plan to bring BTC into the $13,000-zone.

Santiment’s holder’s distribution charts show you the number of addresses having a place with a specific symbolic section. According to the chart, the number of addresses holding 10,000-100,000 tokens tumbled from 111 on October 8 to 104 on October 20. This is an intensely bearish sign as it shows that the whales are selling off their property.

Bitcoin buyers have the opportunity to bring the cost into the level at $13,000 and even the $14,000 interference. The everyday intersection finder shows a total absence of solid opposition barriers straightforward.

For the bears, the drawback is covered off at the $12,000-$12,100 uphold divider. A break below that zone will bring the value down to $11,000, which has both the 50-day and 100-day SMA

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Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

Cryptos Market: Bitcoin Shows Bullish Momentum Over Dollar Strength

The BTC/USD traded at the level of $11,355 after the mild rejection of the top-level $11,720 that losing some of the bullish.

Ethereum USD had a similar fate at the higher risk that seeing the longer pullback than the Bitcoin. If we talk about the XRP/USD is the clear loser after breaking below the 50 SMA and the 100 SMA on the daily chart that currently trading at the level of $0.2482 after yet facing another rejection.

Bitcoin, BTC to USD, fell by 1.02% on Tuesday. Incompletely turning around a 1.55% increase from Monday, Bitcoin finished the day at the level of $11,442.0.

It was a quiet beginning to the day. Bitcoin rose to a late morning intraday high to the level of $11,574.9 before operating reverse.

Missing the mark concerning the primary significant obstruction level at $11,830, Bitcoin tumbled to an early evening intraday low of $11,333.0.

Avoiding the primary significant help level at $11,201 Bitcoin quickly returned to $11,470 levels before moving back.

The close term bullish pattern stayed perfect, upheld by the most recent move back through to $11,000 levels. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to shape a close term bearish pattern.

Bitcoin was up by 0.22% to $11,467.0. A beginning to the day saw Bitcoin tumble to an early morning low of $11,427.0 before ascending to a high at the level of $11,467.0. Bitcoin left the support and Resistance levels untested at an early stage.

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Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Ethereum Rate Hits at Higher Level More Profitable Than Bitcoin Mining

Let’s have a look at the cryptocurrency that hovering near to the level at $10,600 mark. The Bitcoin price is consolidating to the 50-12 Hour SMA and the 200-12 Hours SMA. The strong resistance lies at the level 50-12 SMA that repeatedly rejected the price.

This repeated dismissal may drop the value down to the level at  $10,400 uphold level, which is by all accounts the main observable help level on the drawback. If case this level doesn’t hold firm, at that point you can anticipate that the cost should plunge below $10,000. For this situation, one can anticipate that BTC should tumble to the level of $9,700 before it experiences another solid help.

While this may not appear to be a huge number, remember that every one of these addresses holds a great many dollars worth of Bitcoin. The fishes using the stale value activity to merge their positions look good for the general market.

With respect to the top 50 digital forms of money, the greatest failures incorporate Compound, down 12% over the most recent 24 hours, UMA down 12%, OMG Network down at the level 13%, Yearn.finance down 16%, and Aave down 18%. The main bull among the sloths of bears is EOS, which broke out greatly as covered Tuesday.

Ethereum has since September 23, been holding inside a rising equal channel. Recuperation towards $400 flamed out marginally above $360 a week ago. On the drawback, the misfortunes that followed grasped uphold at the level of $335 throughout the end of the week, permitting the shrewd agreement sign to revitalize, making strides above $350.

The Ethereum selling pressure in the market halted the increase at the 50 SMA and 100 SMA. Ether fell below the climbing channel, confirming a bear banner.

The downside of a significant help zone shows that Ethereum is at grave risk of spiraling to the level at $300. Other than the various simple help zones, the most significant one lies somewhere in the range of $298 and $309. Previously, around 879,000 locations purchased almost 2 million ETH.

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Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

Cryptocurrency Bitcoin Shows the Bullish Divergence on User Count

The Bitcoin moves back and shows the bearish to the start of the day with the support level at $10,900 to the broader market.

The Bitcoin BTC to USD is rose by the level at 1.33% this Tuesday and reversing the loss at the level of 0.83% on Monday.

It was a mixed start to the day. Bitcoin fell to an early morning low $10,674.2 before finding support.

Steering clear of the major support levels, Bitcoin struck a late morning high at the level of $10,815.4 before operating reverse.

Coming up short of the major resistance levels, Bitcoin slid to a late afternoon intraday low $10,654.0.

Steering clear of the first major support level at $10,585, Bitcoin rallied to a final hour intraday high at the level of $10,889.0.

Falling short of the first major resistance level at $10,915, Bitcoin eased back to end the day at sub-$10,860 levels.

The near-term bullish trend remained whole, in contempt of the latest pullback. For the bears, Bitcoin would need to slide through the 62% FIB of $6,400 to form a near-term bearish trend. At the hour of composing, Bitcoin was somewhere around 0.28% to the level of $10,826.0. It was a blended beginning to the day. Bitcoin rose to an early morning high $10,866.0 before tumbling to a low $10,826.0.

Bitcoin started the significant help and obstruction levels untested from the get-go. Somewhere else, it was a blended beginning to the day.

Bitcoin Cash ABC (+0.54%), Bitcoin Cash SV to the level (+0.62%), and Crypto.com Coin (+0.65%) evaded the pattern right off the bat.

It was a bearish beginning to the day for the remainder of the majors, in any case. Binance Coin was somewhere around 1.18% to lead the way down.

https://xtreamforex.com/nasdaq-futures-shows-the-short/

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