This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
US Stocks Enjoy Their Best Week Since June, JPY Weakens
This week starts with the news from China, the first US election results, and fresh speculations over the crypto market and the FTX scandal. Let's have a closer look at the headlines.
18:30 GMT+2 - FOMC Member Brainard Speaks
Today, BOJ Governor Haruhiko Kuroda said that the regulator would continue conducting monetary policy easing amid a slow economic recovery while keeping an eye on both upside and downside risks. While it confirms that Japan's prices are progressing toward sustainable inflation, it also signals uncertainty in the global economy. USDJPY has gained more than 0.8% since the start of the trading day, erasing the previous week's losses. The first obstacle for buyers lies at 140.80 (100-day SMA). If the price sticks above this level, bulls will push the price higher toward the resistance zone at 144.50-145.40.
Other news worth mentioning:
- The week-long saga that began with an abandoned takeover deal of FTX by Binance ended with FTX's bankruptcy. Analysts mention that millions of dollars of assets had been moved from the platform under what they called "suspicious circumstances." According to some sources, the founder of FTX had secretly transferred $10 billion of customer funds from the exchange to his own trading company Alameda Research. The customers are warned they have a low chance of recovering their deposits.
- Binance, the world’s biggest crypto trading exchange platform, and smaller rivals, including Crypto.com, OKX, and Derebit, have vowed to unveil information that they hold sufficient reserves to match their liabilities to customers.
- The preliminary results of the US Parliamentary Elections were revealed, with Democrats leading 50 seats to 49 in the upper chamber of the US Congress. As for the House, polls place Republicans on 203 seats and Democrats on 212. The winner needs 218 for a majority. Some analysts suggest that if Republicans control the House of Representatives, it will increase oil prices.
- Disney reportedly plans to freeze hiring and fire some employees after disappointing quarterly results last Tuesday. The Disney stock gained more than 4% on Friday after a huge selloff.
- US President Joe Biden meets China's leader Xi Jinping on Monday, where they are set to discuss macroeconomic issues and existing problems between the biggest economies.
- US stocks jumped almost 7% last week, marking their best week since June on upbeat inflation data.
- Beijing and several other major cities in China reported record COVID-19 infections on Monday. HK50 slid lower after testing the levels above 18 000.
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S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
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The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.