US Consumer Price Index data highly anticipated; Precious metals hit new highs; USD/JPY trades near 34-year high at ¥152; RBNZ leaves rates unchanged at 5.50%.
➡️ Markets will be watching today's CPI data very closely US, with inflation expected to show a slight decline from the previous monthly increase, from 0.4% to 0.3%. This would result in an annualized rate increase of 3.4%. If inflation is higher than expected, this will likely boost the US dollar and hit stock markets and commodities. If lower than expected, the opposite will likely happen.
➡️ Yesterday, They spot once again rose to a new all-time high above $2,365. Gold tends to be positively correlated with risky assets, some of which have rallied to new highs in recent days. Trend traders will want to stay here for a long time. Other precious metals also posted gains, with silver which again reached a new 2.5-year high price. Even some non-precious metals such as copper are reaching new long-term highs.
➡️ In its policy statement a few hours ago, the Reserve Bank of New Zealand kept its official cash rate at 5.50%, as expected. The language used in the statement was decidedly restrictive, and the value of the New Zealand dollar increased slightly following the release.
➡️ In the Forex market , trades against the Japanese Yen hit a 17-year high, suggesting that the Yen's historic lows will soon be tested again despite the clear risk of intervention in that area by the Bank of Japan. Governor Ueda stated that forex movements will not lead to a change in monetary policy, which will remain accommodative for the time being. The USD/JPY currency pair is close to its 34-year low price just below ¥152, and trend traders they will get excited if we see an extended bullish breakout above ¥152 later. Since Tokyo opened today, the strongest major currency has been the New Zealand dollar, while the weakest major currency has been the Japanese yen.
➡️ Crude oil is making a bearish retracement after WTI and Brent both hit new 5-month high prices on Friday. Traders will receive a variety of supply and demand data this week.
➡️ The lesser commodity Cocoa continues to appear bullish after closing at a new daily high price earlier this week. The value of superfood commodities has nearly tripled in the past year alone, and many analysts suggest that supply-side shortages are at least partly responsible for the meteoric rise. Every year there is more and more demand for cocoa as it is coveted as a key ingredient for chocolate but also as a superfood in its own right. Trend traders will be interested here on the long side. In addition to cocoa futures, cocoa ETNs are available which may be more suitable for traders and retail investors.
➡️ The Bank of Canada will hold a policy meeting later today, where it is expected to leave rates unchanged at 5.00%. There is a small chance of a cut, and markets will be scrutinizing the Bank's language for clues about future rate hikes.
➡️ The Federal Reserve will release its latest minutes later today FOMC meeting.
Credit by DailyForex.com
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