Asia stocks off record highs as Wall St. flags, higher yields support dollar.

Asian stocks retreated from record peaks on Tuesday after a selloff in Apple shares knocked Wall Street, while the dollar found support as U.S. bond yields climbed to near four-year highs. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was down 0.3 percent after rising to a record high the previous day. Australian stocks shed 0.65 percent, South Korea’s KOSPI .KS11 lost 0.3 percent and Japan’s Nikkei .N225 dropped 0.5 percent. The bearish sentiment in Asia followed a softer lead from Wall Street, which has led a global equities rally over the past year thanks to strong world growth fuelling higher corporate earnings and stock valuations. Read More @ https://www.reuters.com/article/us-global-markets/asia-stocks-off-record-highs-as-wall-st-flags-higher-yields-support-dollar-idUSKBN1FJ03A

THE THREAT OF USD GOING TO THE SOUTH REMAINS. WE MAINTAIN SELL TODAY.

The US dollar is having one of its best days in three months.  It is coinciding with the push in 10-year yields above 2.70% and the two-year yield at its highest level since 2008 (~2.13%).  It may have been encouraged by a push back against the ECB hawks who want to end QE as soon as possible and preannounce an end date.
 The doves suggest that there continues to be a consensus for tapering the current purchases after September.  This can still change, of course, but the idea is that there will not be an abrupt end in September.  Because of the sequencing, which Draghi reconfirmed and underscored, the longer the purchases, the further off the rate hike.
 We argue that the market has exaggerated the timing of peak divergence.  It is still at least a year away.  The market feels more confident that the Fed will be raising interest rates this year starting in March.  By the time the ECB will raise its negative 40 bp to negative 30 bp or negative 20 bp, the Federal Reserve will have raised interest rates by between 50 bp conservatively and 100 bp by their own estimation.  The Fed’s balance sheet will shrink by roughly $420 bln this year, while the ECB’s will expand by at least 270 bln euros and the BOJ’s by around JPY40 trillion. (MARCTOMARKET).

EURO STARTS CURRENCY AND TRADE WAR WITH US IF US INSIST THEIR WAY. Brussels prepared for trade war with US if it restricts EU imports Donald Trump says the EU has been ‘very unfair’ on US exporters – We are now eyeing 1.30 for EURUSD.

Brussels has warned that it stands ready to retaliate and potentially open up a transatlantic trade war if the US delivers on apparent threats to restrict European imports. The US president, Donald Trump, claimed in an interview with ITV broadcast on Sunday that the EU had been “very unfair” on American exporters, and that it would “morph into something very big” that would “turn out to be very much to [the EU’s] detriment”. Read More @ https://www.theguardian.com/uk-news/2018/jan/29/brussels-prepared-for-trade-war-with-us-if-it-restricts-eu-imports

TODAYS NEWS THAT MIGHT INTERFERE WITH YOUR TECHNICAL ANALYSIS.

  1. 1.00pm – BOJ will release their CORE CPI which is an important data for BOJ to make decision on shortening asset purchases and QE. We maintain SELL for USDJPY till 105.
  2. 2.30pm – French will release their CPI which is expected to be good. We maintain BUY for EURUSD.
  3. ALL DAY – Critical News – German CPI – We are expecting a good data and you expect huge volatility for EUR pairs.
  4. 4.00pm – Spanish will release their CPI – same as the French we expect a good data.
  5. 6.00pm – EURO will release awaited data by traders – EUR GDP – expected to be the same or better. We Buy EURUSD.
  6. 11.00pm – US will release Consumer Confidence – is expected to fall. We maintain SELL for USD.
  7. 11.30pm – UK Governor Mark Carney will speak and you can expect some good quality volatility for GBP Pairs – we expecting upward movement for GBP.

Overall the market is punishing USD and the USD will be continue to fall till $87. Remain cautious to news as the fundamental are in favor for USD in the long term. Maintain good money management.

High Risk Investment Warning:

Please note that Forex and other leveraged trading involves significant risk of loss, It is not suitable for all traders and you should make sure you understand the risks involved, it is recommended that you seek an independent advice, if necessary

 

1 Comment
  1. stornobrzinol 1 month ago

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