Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
USD/JPY: outlook for May 1-5
2019-11-11 • Updated
USD/JPY hit 111.75 in the beginning of the past week boosted by a market-friendly first round French election result. Then, USD erased some of its gains following the release of one-page Trump's tax plan. On Thursday, the Bank of Japan released its monetary policy statement. Policymakers kept their interest rate and long-term yield target unchanged pledging to maintain its massive monetary stimulus until inflation rises to 2%. A flood of first-tier data the day after the Bank of Japan’s meeting indicated that the modest recovery in Japan’s economy is continuing, yet inflation is still low. USD/JPY stayed almost untouched following the data releases.
Next week the US dollar will be a bellwether of the pair since yen’s economic calendar is extremely light. Japan’s banks will be on holidays from Wednesday to Friday. On Monday, US Treasury Secretary Mnuchin will speak at the Milken Conference. His remarks have become proven market drivers since Trump’s inauguration, so you should probably cast a glance at the headlines of his speech. The Fed’s rate announcement and US labor market report will be in the spotlight next week. Markets don’t expect significant changes from the Fed’s policymakers this time. US NFP, unemployment rate, and wage growth are expected to produce a greater effect. Being overwhelmed with the US events and economic releases, don’t overlook the BoJ’s annual inflation figures coming on Tuesday.
On the USD/JPY technical chart, the short-term consolidation phase is still intact. 50-day SMA located near 111.80 might once again attract buying interest. If quotes manage to clear this hurdle, there will be a continuation of the rally towards 113.40, 114.00. The downside potential is limited to 109.90 (100-H4 MA). In case of the US government shutdown, escalation of global tensions, or disappointing economic figures, the quotes might slide towards 109.90, 109.10 levels.
Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.
China's economy is rocketing. On the other hand OPEC+ countries take the decision to cut the production. What will be the impact on the oil price?
Get ready for some suspense as the Bank of Canada faces a tough decision on whether to raise interest rates or keep them on hold. The resilient Canadian economy and the goal of curbing inflation further are at the heart of this dilemma. While some money markets and economists predict another rate hike, others believe the central bank should exercise caution and wait, hinting at a possible increase later in the summer.
Let's take a closer look at Australia's recent economic performance. Brace yourselves for some interesting developments. The country's economy experienced its slowest growth since late 2021 in the first quarter, raising doubts about the Reserve Bank of Australia's rapid interest rate increases. Despite the bank's record-breaking 12 rate hikes in the last 13 months, the resource-rich economy only grew by a modest 0.2% in the quarter, falling short of economists' expectations.
Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear.