• BOJ governor Ueda declines to comment on being “behind the curve”

    • No comment on short-term moves in market
    • Need to look at actual data to see how tariff-induced inflation in the US negatively affects Japan’s exports
    • Not yet at the point where higher tariffs are having that negative impact though
    • Food price inflation would not have a big impact on underlying inflation but there is a risk

    The press conference is slowly winding down and I wouldn’t expect any more major remarks from here. Overall, Ueda has just come out to mostly brush aside the dissents from Takata and Tamura while reaffirming that the main line of communication remains the majority view in the BOJ. USD/JPY has trimmed a chunk of its losses to 147.88 on the day, helped by some light dollar firmness to start the session.

    This article was written by Justin Low at investinglive.com.

  • European indices kick start the session with marginal gains only

    • Eurostoxx +0.1%
    • Germany DAX +0.1%
    • France CAC 40 +0.3%
    • UK FTSE -0.2%
    • Spain IBEX +0.3%
    • Italy FTSE MIB +0.2%

    Do keep an eye out on the mood in US futures though. S&P 500 futures are now down 0.15% and that could yet start to see European stocks roll over amid some selling as we get to US trading later. For now, there is still a calmer mood as regional stocks to try to recover some added poise in trading this week.

    This article was written by Justin Low at investinglive.com.

  • Gold consolidates near all-time highs as traders switch their focus to the data

    Fundamental
    Overview

    Gold extended the gains
    into a new all-time high right before the FOMC decision but eventually gave
    back everything as the Fed didn’t match the very dovish expectations priced in by
    the market.

    In fact, the dot plot
    showed that the FOMC projected two more rate cuts for 2025 by a narrow
    majority, with the rest of officials expecting just one more or even none.
    Moreover, the Fed projected just one cut in 2026 compared to three that the
    market was pricing before the decision.

    Fed Chair Powell then
    labelled the rate cut as a “risk management” action given the weakening in the
    labour market data. But overall, he sounded pretty neutral even though he
    understandably placed more emphasis on the labour market given the two consecutive
    soft NFP reports.

    Looking forward, it’s going
    to be all about the data. Strong data will likely trigger a hawkish repricing
    in interest rates expectations and weigh on gold. On the other hand, weak data
    will likely continue to support it.

    In the bigger picture, gold
    should remain in an uptrend as real yields will likely continue to fall amid
    the Fed’s dovish reaction function. In the short-term though, hawkish repricing
    in interest rates expectations will likely keep on triggering corrections.

    Gold
    Technical Analysis – Daily Timeframe

    On the daily chart, we can
    see that gold made one last push into a new all-time high before the FOMC
    decision and then erased the gains as the Fed didn’t match the very dovish
    expectations from the market.

    From a risk management perspective, the buyers
    will have a better risk to reward setup around the major trendline, while the sellers will look for a
    break lower to extend the drop into the 3,120 level next. Such a big correction
    might happen if we get strong US data in the next weeks that triggers a hawkish
    repricing in interest rates expectations.

    Gold Technical Analysis
    – 4 hour Timeframe

    On the 4 hour chart, we can
    see that we have a minor upward trendline defining the bullish momentum. We
    have also a minor support
    around the 3,615 level. The buyers will likely step in around the trendline and
    the support to position for a rally into a new all-time high, while the sellers
    will look for downside breakouts to pile in for a drop into the major
    trendline.

    Gold Technical Analysis
    – 1 hour Timeframe

    On the 1 hour chart, we can
    see that we have an important swing level at 3,672 that acted as resistance
    recently. If the price breaks to the upside, we can expect the buyers to pile
    in for a rally into a new all-time high. The sellers, on the other hand, will
    likely lean on that level with a defined risk above it to position for a drop
    into the 3,615 support with a better risk to reward setup. The red lines define
    the average daily range for today.

    This article was written by Giuseppe Dellamotta at investinglive.com.

  • BOJ governor Ueda: Board members did not agree to proposal by Takata, Tamura

    • Underlying inflation is still below 2% but approaching that level
    • Need to be mindful of downside risks to prices from tariffs
    • We want to look at more data
    • Want to scrutinise the data amid high uncertainties from trade policies on the economy
    • We plan to proceed with ETF, J-REIT sales until they are fully disposed
    • Not considering changing pace of ETF sales to adjust monetary policy

    Again, he seems to be mostly conveying the majority view and dismissing the dissents from Takata and Tamura. In other words, he’s trying to not make a big deal out of it. As for the ETF sales, I noted earlier how at the current pace it would take 112 years for them to fully unload their holdings. Good luck with that. USD/JPY has now erased losses on the day to 147.95 currently.

    This article was written by Justin Low at investinglive.com.

End of content

End of content