🗓 Important upcoming events and publications (GMT):
🇯🇵 06:30 Bank of Japan press conference may cause volatility in pairs with #JPY, if Chairman Kuroda hints at monetary policy changes.
🇪🇺 10:00 Eurozone consumer price index is able to influence the dynamics of #EUR, as the markets are keeping on eye closely inflation trends. The important news was the acceleration of inflation in Germany to 2.5%, above expectations. That fact increased the chances that the Eurozone CPI growth will also exceed the current estimate and forecast of 2.1%.
🇺🇸 12:15 ADP Nonfarm employment change can provoke violent movements in financial markets and significantly affect the #USD quotes in the event of a strong discrepancy with forecasts, which now amount to 190 thousand versus 230 thousand a month earlier. We can not exclude the release of very weak data after the failure of official payrolls.
🇨🇦 12:30 Block of statistics from Canada, where the most important data is the GDP dynamics in August. The country's economy is slowing the growth, but it is still within trend levels, allowing the Bank of Canada to raise rates. A sharper slowdown may cause the BC to reconsider its plans and affect the #CAD quotes.
🇯🇵 06:30 Bank of Japan press conference may cause volatility in pairs with #JPY, if Chairman Kuroda hints at monetary policy changes.
🇪🇺 10:00 Eurozone consumer price index is able to influence the dynamics of #EUR, as the markets are keeping on eye closely inflation trends. The important news was the acceleration of inflation in Germany to 2.5%, above expectations. That fact increased the chances that the Eurozone CPI growth will also exceed the current estimate and forecast of 2.1%.
🇺🇸 12:15 ADP Nonfarm employment change can provoke violent movements in financial markets and significantly affect the #USD quotes in the event of a strong discrepancy with forecasts, which now amount to 190 thousand versus 230 thousand a month earlier. We can not exclude the release of very weak data after the failure of official payrolls.
🇨🇦 12:30 Block of statistics from Canada, where the most important data is the GDP dynamics in August. The country's economy is slowing the growth, but it is still within trend levels, allowing the Bank of Canada to raise rates. A sharper slowdown may cause the BC to reconsider its plans and affect the #CAD quotes.
#USD holds its positions against #EUR, #JPY, but adds to #AUD, #GBP, which reflects the preservation of traction in protective assets. Stock indices lose more than 1% as #SPX and #DJIA drop by 1.5% over the past 24h. #Gold and #Bitcoin have impressively increased due to the increased demand for safe-havens.
#USD retreats significantly to the so-called safe #JPY, #CHF. On Friday morning the stock markets note carefully rollback after the drop a day earlier, #Nikkei225, #SPX recoup some of their losses Thursday. #Brent recovering reduces more than 5.5% decline the day before. #Gold and #Bitcoin are growing up.
Since Friday morning, the markets have seen a significant push to the safe-haven assets: #JPY, #CHF add about 0.6% and hold positions on Monday morning. Key stock indices (#SPX, #Nikkei, #DAX) lose more than 1%. #Brent collapsed below $61, losing more than 10% since Thursday. #Gold actively increasing.
#FxProInsight Markets cautiously silent before FOMC Decision on Wednesday. #USD adds to most currencies except #EUR, #JPY as a sign of risk aversion. #Gold returned to growth and traded just under $1350. #Brent at $60. Infographic description
#JPY was the hero of the day on Thursday, adding over 1.7% vs USD and 1.6% vs EUR. The yen has been sided by Japan's regional banks, which are rumoured to be lobbying for the abandonment of the yield targeting policy. USDJPY dipped below 145, and EURJPY fell under 156.
Simultaneously, markets are laying that Fed and ECB rates have reached a plateau, and the next step will be to lower them. The logical outcome of this divergence is an accelerated narrowing of yield spreads between Japanese and other G7 economies bonds, bringing capital back into the yen.
Yen appreciation has been on a steady course since early November, a couple of weeks after the peak in US 10-year yields, when markets became convinced that their decline had become a trend.
Also, the yen may work the cautious mood of the stock markets in recent days. The yen is very often used as a funding currency to buy risky assets. The shift of market sentiment to profit-taking on major indices triggered a predictable deleveraging.
Simultaneously, markets are laying that Fed and ECB rates have reached a plateau, and the next step will be to lower them. The logical outcome of this divergence is an accelerated narrowing of yield spreads between Japanese and other G7 economies bonds, bringing capital back into the yen.
Yen appreciation has been on a steady course since early November, a couple of weeks after the peak in US 10-year yields, when markets became convinced that their decline had become a trend.
Also, the yen may work the cautious mood of the stock markets in recent days. The yen is very often used as a funding currency to buy risky assets. The shift of market sentiment to profit-taking on major indices triggered a predictable deleveraging.
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