Markets are Looking for Clues to Determine the Direction

Market Reviews

Direction in the forex markets is rather unclear, as investors are focused on the upcoming meeting of the central banks of Japan, US and England. The bank of Japan will announce its rate decision tomorrow. It’s widely expected that the Bank will keep monetary policy unchanged. Under the Yield Curve Control framework, short term policy rate should be held at -0.10%. Target on 10 year JGB yields will also remain at around 0%.

On the currency markets, euro and Swiss franc are slightly lifted. New Zealand dollar is trading as the strongest one. Meanwhile, Japanese yen and Australian dollar are trading as the weakest ones, followed by US dollar.

Today’s data showed, that UK mortgage approvals grew by 1k to 66k in June, M4 money supply fell by 0.3% mom. Eurozone business climate dropped to 1.29 in July, missed expectation of 1.35. Economic confidence dropped -0.2 to 112.1, above expectation of 112.0. Industrial confidence dropped 1.1 to 5.8, below expectation of 6.7. Services confidence rose 0.9 to 15.3, above expectation of 14.2. Consumer confidence was finalized at -0.6. German CPI slowed to 2.0% yoy in July, below expectation of 2.1% yoy.

Also, Japanese retail sales rose 1.8% yoy in Jun, above expectation of 1.7% yoy. Swiss KOF Economic Barometer fell by 0.2 to 101.1 in July, below expectation of 101.5.

Jeremy Hunt (UK Foreign Minister) has discussed the possibility of a free trade agreement between the UK and China with Wang Yi (China’s Foreign Minister). After the meeting in Beijing today, Hunt said China made an offer to “to open discussions about a possible free trade deal done between Britain and China post Brexit”.