VOT Research Desk
Key News – Insights and Analysis
Optimism and Direction. What is Next?
The Euro has maintained its gains from yesterday on the back of a falling US Dollar and rising hopes for an end to hyper-ratings. That might be a little too soon, if the Federal Reserve’s rhetoric is anything to go by.
Mary Daly, president of the San Francisco Fed, remained hawkish overnight, claiming that people’s ailment is caused by inflation rather than job loss.
She said that once restrictive policy is in place, it needs to be maintained for some time and that inflation is “corrosive” and as, Ivy.
Her remarks are in line with those of New York Federal Reserve President John Williams, who spoke similarly as aggressive, and the remainder of the week will see a slew of Fed speakers cross the wires.
The message from the Fed seems to be very different from what the market wants to happen. It is important to note that the speech that Fed Chair Jerome Powell gave at the symposium in Jackson Hole at the end of August ended their rate path’s early exit.
In any case, APAC stocks have maintained their strong lead over Wall Street, and as Hong Kong has returned from a few days off, the Hang Seng index has added more than 5% as it tries to catch up.
Mainland China is still on vacation, but the stock markets of Australia and Japan have also seen some decent upside.
As expected, the RBNZ raised interest rates by 50 basis points to 3.50 percent. The central bank considered a 50 or 75 basis point increase and concluded that it was appropriate to maintain the current rate of increase. This is their fifth consecutive 50 bp.
In contrast, the RBA raised interest rates yesterday by 25 basis points rather than the 50 basis points anticipated. Consequently, today’s AUD/NZD exchange rate is lower once more.USD/JPY fell below 144, but it has since rebounded, and GBP/USD is above 1.1400.
In another instance.
The WTI futures contract is close to US$ 86 bbl, representing a decrease of approximately 0.50 percent from the North American close. Additionally, gold has maintained overnight gains, trading just below US$ 1,720 per ounce.
In the future, in addition to the main speakers today, the United States will receive employment and trade figures, and Canada will also receive some trade figures.
EUR/USD is still in a trend channel that is downward, but it is beginning to test the channel’s upper band.
A close above it and the subsequent simple moving average (SMA) may indicate that bearish momentum is fading.
Before a group of breakpoints and a previous high in the 1.0340–1.0370 range, the peak at 1.0198 earlier this month may serve as resistance. The most recent low of 0.9536 might serve as support…
