The BOJ meeting this week is dominating trades as the new week kicks-off. Japanese 10-yr yields trading at 0.51% above the BOJ ceiling and adding to the speculation that the ceiling could be raised to 1.0% on Wednesday. US stocks closed higher again on Friday and gained 2.3% last week. US markets are closed today and Asian markets are broadly higher expectations of China opening quickly even as COVID deaths hit record levels. The USD trades at 7-mth lows, GOLD at April 2022 highs, and BTC over $21k and 2-mth highs.
Week Ahead – BOJ Wednesday, US – Retail Sales, PPI, Empire & Philly Fed & Housing data. EZ – ZEW. UK – CPI, Jobs & Retails sales. CAD – CPI & Retail sales. AUD – Jobs. EARNINGS SEASON In full swing (Morgan Stanley, Goldman Sachs & Netflix headline).
- The USD Index tanked under 102.00 on Friday to close at 101.85.
- EUR – holds over 1.0800. The pair touched 1.0860 in early trades and back to 1.0835 now.
- JPY – dipped again touching 127.30 lows (last seen April 2022) in Asian trading, back to test 128.00 now.
- GBP – Sterling tested 1.2290 before slipping back to test 1.2225 support.
- Stocks – The US markets closed higher on Friday (+0.33-0.71%), following generally good Banking Earnings, tempered by cautious outlooks and job losses. US500 +16.03 (0.40%) at 3999. JPM +2.52%, COIN +5.11%, AMZN +2.99%. FUTS trade at 4018.
- USOil – rallied again to trade at $80.00 last week, up from January 5th lows at $72.30.
- Gold – the Bid remains strong as $1900 holds, and $1930 was tested in Asia, back to $1915 now.
- BTC – Weak USD helps to lift prices over $20k touching $21.3k today.
Today – Eurogroup Meetings, BOC Business Outlook, Speech from BOE’s Bailey – DAVOS meetings start, US markets closed for MLK day.
Biggest FX Mover @ (07:30 GMT) NZDJPY (+0.27%). Bounced from a test of 81.00 on Friday and adds to gains today at 81.80 but is down from 88.00 highs in December. MAs flat, MACD histogram & signal line negative but rising. RSI 46.60 & neutral, H1 ATR 0.205, Daily ATR 1.185.
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Stuart Cowell
Head Market Analyst
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