Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Evergreen buck inches down
On Monday, the evergreen buck slips in Europe, although holding on to most of the profits made during Friday’s huge risk-off movement in global financial markets.
The weekend might have provided financial markets with the chance to decelerate and reflect on Friday’s events, although they have started in a negative mood once again. Additionally, bond yields and stock markets have gone down from Japan to Australia and Hong Kong because investors zero in on how 10-year Treasury gains dived below 3-month rates on Friday.
Besides this, volatility among developed market currencies kept to their limits. Eventually, the common currency demonstrated an outcome of $1.1309, diving by about 0.1%, while the UK pound showed $1.3186, decreasing a bit from overnight levels.
Gauging the US currency’s purchasing value versus its primary peers the USD index hit 96.097 - a level above it was before the Fed’s policy announcements the previous week.
As for Turkey’s lira, this currency was also demonstrating a mild rebound after its worst day since the previous year’s currency downtime, provoked by a dive in the major bank’s foreign exchange reserves and also made worse by President Recep Tayyip Erdogan’s rebuke of US leader’s call for international recognition of Israel’s control over the Golan Heights in Syria. As a matter of fact, the Turkish lira hit 5.6515 versus the evergreen buck, having dived from 5.8300 on Friday.
The first test of market sentiment of the week is due nearly instantly, as Germany’s Ifo business climate index is going to either corroborate the previous week’s shocking manufacturing poll from IHS Markit or providing some reassurance that things aren’t so bad. Evidently, the headline index is anticipated to rally mildly from its four-year minimum of 98.5 to 98.7 last month.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Have a look at the key financial instruments on Monday, February 28. Geopolitics is currently on all news frontlines. Western nations escalated sanctions on Russia for the invasion of Ukraine.
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.