European Open: Currencies tread water ahead of Jerome Powell speech

Asian Indices:

Australia's ASX 200 index fell by -34.9 points (-0.46%) and currently trades at 7,504.10
Japan's Nikkei 225 index has fallen by -9.28 points (-0.03%) and currently trades at 27,684.37
Hong Kong's Hang Seng index has risen by 140.98 points (0.66%) and currently trades at 21,363.14
China's A50 Index has risen by 6.86 points (0.05%) and currently trades at 13,549.52

UK and Europe:

UK's FTSE 100 futures are currently up 6 points (0.08%), the cash market is currently estimated to open at 7,842.71
Euro STOXX 50 futures are currently up 6 points (0.14%), the cash market is currently estimated to open at 4,211.45
Germany's DAX futures are currently up 11 points (0.07%), the cash market is currently estimated to open at 15,356.91

US Futures:

DJI futures are currently up 12 points (0.04%)
S&P 500 futures are currently up 22.5 points (0.18%)
Nasdaq 100 futures are currently up 5 points (0.12%)

Earnings:

UK earnings: BMO – Carlsberg, BP

* BMO = Before market open, DMH = During market hours, AMC = After market close, TNS = Time not specified

Jerome Powell’s speech will be a main focus at 17:40 GMT, given the strong employment report on Friday and hawkish comments from Bostic. The Fed have a strong tendency to try and (re)shape market expectations following their meetings, when they feel their message has been misconstrued.

Given money markets initially lowered the Fed’s anticipated terminal rate to 5% and begin pricing in two cuts this year, there’s a decent chance Powell will strike a hawkish tone today.

Yesterday, the Fed’s Bostic told Bloomberg that he thinks the Fed may need to raise rates higher than the Fed anticipated and keep them higher for longer. This could suggest he anticipates rates to be 5.5% or greater and aims to remove expectations of rate cuts this year.

BOE’s Ramsden Pill speak at 09:00 and 10:15 respectively at the Royal Economic Society for Women, the Cunliffe speaks about digital currencies at 15:00
The BOC’s Govenor Macklem speaks on “how monetary policy works” at 17:45
The RBA hiked rates by 25bp to a 10-year high of 3.35% (and indicated more hikes are to follow)
The US dollar was the weakest major currency overnight, but the low levels of volatility show support for the dollar ahead of Jerome Powell’s speech

USD/JPY 4-hour chart

USD/JPY has pulled back slightly from its 20-day high having met resistance at the 50-day EMA. With Jerome Powell’s speech in full focus, it can be the difference between USD/JPY rallying or falling from current levels. Ultimately, traders will want to hear a hawkish message that supports the post-NFP rally, otherwise its vulnerable to some profit taking. For now, pullbacks towards gap support 200-bar EMA could tempt bears to return to the table, whilst a break below 131 suggests the trend has reversed on this timeframe.

Economic events up next (Times in GMT)

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.