OANDA Senior Market Analyst Craig Erlam discusses the latest moves in gold on the back of the Fed's interest rate hike.
28-07-2023 05:16 GMT
by Craig Erlam
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Bank of Japan maintained its ultra-loose monetary policy but issued a lukewarm hawkish statement to introduce a “flexible” Yield Curve Control programme on the 10-year JGB yield.
JPY strengthen but did not lead to a sell-off in other Asian benchmark stock indices.
Nikkei 225 has managed to trim its intraday loss of -2.60% and ended with a smaller magnitude of -0.4%.
Japanese banks outperformed; the TOPIX-17 Banks ETF rallied by +4.70%.
The new YCC with “greater flexibility” may reduce specul
28-07-2023 04:48 GMT
by Kelvin Wong
ECB hikes rates by 25 basis points
Signals the central bank may pause at the next meeting in September
Euro slides as eurozone yields fall
The ECB raised rates for potentially the final time in the tightening cycle on Thursday, although it refused to give any indication of what will happen going forward.
Instead, the central bank is insisting that decisions will be guided by the economic data and that interest rates will need to remain sufficiently restrictive for some time.
27-07-2023 10:13 GMT
by Craig Erlam
The 20-day moving average has capped further upside in the USD/JPY so far since last Friday, 21 July.
BoJ will release its monetary policy decision and latest quarterly outlook report tomorrow, 28 July. The consensus is an upgrade for its FY2023 consumer inflation forecast to be above 2% while maintaining the upper limit of the YCC at 0.50%.
Recent minor downtrend phase from 21 July 2023 high of 141.95 to today, current intraday low of 139.38 may see a retracement.
Key resistance zone at 140.70/
27-07-2023 05:59 GMT
by Kelvin Wong
The press release of the recently concluded China’s Politburo meeting consisted of a more expansionary tone such as the implementation of “counter-cyclical” measures.
A dovish tilt is now being priced in by interest rates futures after yesterday’s FOMC meeting. Based on the CME FedWatch tool, the odds have increased to bring forward the expected first Fed Funds rate cut to March 2024 from May/June 2024.
27-07-2023 01:47 GMT
by Kelvin Wong
OANDA Senior Market Analyst Ed Moya joins Jonny Hart and Trader Nick to discuss the FOMC decision, preview the ECB, and recap mega-cap tech earnings.
26-07-2023 17:14 GMT
by Edward Moya
EIA Report: stockpiles dropped 600K vs -2.12M eyed
Crude production falls to 12.2 million bpd (lower boundaries of this year's range)
Gold struggles as Fed leaves door open for more hikes
Oil
Crude prices softened after the EIA crude oil inventory report stockpiles fell less-than-expected as surging gasoline prices weighed on demand. Gas is almost over 10 cents a gallon according to AAA and that rising trend might continue going to the end of summer. Crude exports also rose above the 4 milli
26-07-2023 15:29 GMT
by Edward Moya
Fed swaps show only an 18% chance of a hike in September (under 50% for November)
FOMC to take data-dependent approach on future hikes
Fed no longer forecasting a recession
The dollar declined as US stocks embraced a patient Fed Chair Powell that will remain dependent with the next two inflation reports before committing to what they will do in September. The Fed is probably done raising rates and that is keeping soft landing hopes alive.
Fed Decision
The Fed raised rates by a quarter-percent
26-07-2023 15:17 GMT
by Edward Moya
Fed and ECB will have a big role to play in EURUSD moves over the next 24 hours
Will both offer a final dovish hike and emphasize data dependency?
EURUSD faces a big test around 1.10 after breaking out earlier this month
EURUSD is trading a little choppy over the last couple of days with traders clearly heavily focused on the outcome of the Fed and ECB meetings.
In both cases, a 25 basis point rate hike is heavily backed in the markets, but at the same time, the language that accompanies the de
26-07-2023 11:41 GMT
by Craig Erlam
The euro is showing limited movement for a second consecutive day. In Wednesday's European session, EUR/USD is trading at 1.1063, up 0.07%.
Is the Fed "one and done"?
The Federal Reserve meets later today, and it's close to a certainty that the Fed will raise rates by 0.25%, which would bring the Fed Funds rate to a range of 5.25% to 5.50%.
26-07-2023 11:18 GMT
by Kenneth Fisher
Rate cut odds for the December FOMC meeting now stands at 15.1% vs 16% yesterday
Protection against yen strength rises to a four-month high
Bearish tones emerging for USD/JPY as top Ichimoku cloud tested
The Japanese yen is catching modest bids here as stocks soften on Microsoft’s disappointing AI outlook and as pressure builds for the BOJ to tighten.
Microsoft’s results were adequate, but that won’t be enough to keep the mega-cap tech/AI trade going. Profit taking will likely remain the
26-07-2023 10:03 GMT
by Edward Moya
The Japanese yen is showing some strength this week and has gained 1.1%, rebounding from the previous week's plunge of 2.2%. In Wednesday's European session, USD/JPY is trading at 140.23, down 0.49%.
Spotlight on Fed, BoJ meetings
The US and Japanese central banks will be on center stage this week, with the Fed meeting later on Wednesday and the Bank of Japan on Friday.
The Fed is widely expected to raise rates today by 0.25%, which would bring the Fed Funds rate to a range of 5.25% to 5.50%.
26-07-2023 08:01 GMT
by Kenneth Fisher
Australian inflation falls more than expected
Fed widely expected to raise rates by 0.25% on Wednesday
The Australian dollar is in negative territory on Wednesday. In the European session, AUD/USD is trading at 0.6758, down 0.49%.
26-07-2023 05:46 GMT
by Kenneth Fisher
Current slowdown in inflationary growth has led to lower odds of another Fed Funds rate hike after today’s FOMC.
Inflationary expectations measured by US breakeven inflation rates have started to tick higher since the end of May, in line with the 19% rally seen in WTI crude oil futures.
If rising inflationary expectations are left unchecked, it may spiral into the real economy with a potential upside reversal in the lagging CPI data in the coming months.
The US Federal Reserve FOMC meeting will
26-07-2023 02:58 GMT
by Kelvin Wong
USD/CAD little changed ahead of FOMC decision
Canadian dollar was fourth-worst performer in the Group-of-10 currencies.
Oil rallies on improved global outlook and Chinese stimulus
Gold awaits the Fed decision
Commodities and some commodity currencies caught a bid after China policymakers signaled more stimulus would soon help their struggling recovery, but that didn't help the Canadian dollar. Canada's largest export has seen oil prices catch a bid over the past month, while the loonie has
25-07-2023 15:25 GMT
by Edward Moya
Chinese stimulus hopes fails to lift the FTSE
Unilever among best performers in the index after reporting earnings
UK100 not far from all-time highs
It's been another relatively flat session for equity markets, with investors seemingly having one eye on the Fed and ECB later in the week despite a strong showing in Chinese stocks earlier in the day.
They were lifted by the promise of Chinese stimulus following the Politburo meeting this week and some potential relief for property market.
25-07-2023 12:46 GMT
by Craig Erlam
Australian inflation expected to slow in Q2
US consumer confidence jumps
AUD/USD rises sharply
The Australian dollar has gained ground on Tuesday. In the North American session, AUD/USD is trading at 0.6783, up 0.65%.
Australian inflation expected to decelerate
Australia releases the second-quarter inflation report on Wednesday.
25-07-2023 11:27 GMT
by Kenneth Fisher
Earnings give stocks one last boost before the FOMC decision
Consumer Confidence surges to a 2-year high
Dow eyes longest winning streak in six years
Volatility should be elevated this week as we have a key FOMC meeting and peak earnings season. So far, the trade has been for the money flow to continue go into small stocks, with some lowering their exposure to mega-cap tech trade. This earnings week has the potential to drive the recession-based pullback that seems to have evaded us this year
25-07-2023 10:59 GMT
by Edward Moya
The euro continues to lose ground and is in negative territory on Tuesday. In the European session, EUR/USD is trading at 1.1036, down 0.26%.
German Ifo Business Climate dips
Germany continues to post soft numbers this week, pointing to weakness in the eurozone's largest economy.
25-07-2023 09:44 GMT
by Kenneth Fisher
The Japanese yen has taken traders on a roller-coaster ride for much of July, but the yen has been calm so far this week. In Tuesday's European session, USD/JPY is trading at 141.36, down 0.08% on the day.
BoJ's inflation gauge dips to 3.0%
The Bank of Japan's preferred inflation indicator, BoJ Core CPI, ticked lower to 3.0% in June, down from 3.1% in May and matched the consensus estimate.
25-07-2023 06:32 GMT
by Kenneth Fisher