Forex

Market Update – January 18 – BOJ Stands Pat

Written by Stuart Cowell

Asian markets weaker as BOJ stays put (-0.1% interest rate) with stimulus package intact, raises inflation target to 1.1% and growth to 3.8% for 2022. Kuroda: “Will ease monetary policy without hesitation as needed, there has been a notable improvement in the economy.”  USD firmer, Yields moved up with US 2-yr over key 1.0%, 10-yr over 1.8%. Oil higher – Saudi’s retaliate, attacking Yemen and Gold holds at $1815.

  • USD (USDIndex 95.25) holds on to gains from Friday, pushing to 953.8 earlier.
  • US Yields 10-yr moved higher again and trades at 1.818%.    
  • Equities – US closed yesterday. Nikkei -0.27% – USA500 FUTS lower again at 4633.     
  • USOil – Spiked over $84.70 as very tight supply, Saudi’s retaliation on Sanaa and NK continued firing of missiles unsettles sentiment.
  • Gold – holds at $1815 from a test of $1823.
  • Bitcoin another down day, tested to $41,600, back to 42,200 now.
  • FX markets – EURUSD back to 1.1400USDJPY now 114.80 tested 115.00 earlier, Cable back to test 200hr MA 1.3620, +20 pips after UK jobs data.

Overnight – UK Earnings in line at 4.2%, Unemployment (4.1%) and Claims better than expected. PBOC deputy governor says will keep yuan exchange rate basically stable.

European Open – The March 10-year Bund future is down -19 ticks, Treasury futures are underperforming. Stocks across Asia struggled with the renewed rise in yields and DAX and FTSE 100 futures are also down -0.3% and -0.2% respectively.  Inflation risks and central bank outlook will be dominating the discussion in coming months.

Today – German ZEW, Empire State Manu. Index & Earnings from Goldman SachsDay 2 of DAVOS (on-line).

Biggest FX Mover @ (07:30 GMT) CADJPY (again) (+0.34% again) Rallied all day over 91.73 (Thursdays high) and onto test 92.00. MAs aligned higher, MACD signal line & histogram higher & above 0 line. RSI 68 rising,  H1 ATR 0.131 Daily ATR 0.804.

Stuart Cowell

Head Market Analyst

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About the author

Stuart Cowell

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

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