GBP king of the hill as traders price in a hawkish boe
US equities grew at the beginning of trading, but then fell again due to geopolitical factors and decisive speeches from several representatives of the FED. Under geopolitical factors is meant the intention of North Korea, aimed at testing missiles and developing their own nuclear capabilities.
While South Korea wants to protect itself and insists on the need for negotiations with the US and China regarding the missile defense complex THAAD. The strong position of the FED’s members is expressed by their confidence in the need to raise rates as soon as possible. You can read more at http://www.opteckscam.com/gbp-king-of-the-hill-as-traders-price-in-a-hawkish-boe.
Moreover, they speak about a second increase immediately after the first, and also about the reduction in the balance of the FED. Asian stocks and indices didn’t follow the example of Wall Street and traded in the green zone. ASX 200 rose by 0.4%, recovering at the end of trading after a negative publication of the country’s annual budget. The Nikkei 225 closed 0.2% higher against the backdrop of the depreciation of the Japanese yen. Shanghai Comp rose by 0.3%, as a result of additional cash injections into the market from the PBOC.
In the foreign exchange market, the US dollar is traded in the green zone. Of all the major currencies, only the British pound managed to change the direction of the trend against the US dollar. This is because market participants are counting on the aggressive nature of the meeting of the Bank of England, which will be held tomorrow. EURUSD is trading at 1.0900, while USDJPY experienced a level of 114.50, after which it again consolidated. The bullish trend of the US dollar will continue until the publication of data and speeches of high-ranking officials will help.
In the commodity market, gold continued to fall in price: bears returned the support level of 1225 and experienced another support at 1214. Then the bulls returned to the market and re-tested 1225, helped by the tense geopolitical situation. Bears now intend not to let the price rise above 1225, then to lower it to 1200. Further development of geopolitical conflicts or a fall in the US dollar rate can help achieve resistance level 1250. Crude oil is traded within the range of 46–47 US dollars per barrel, and market participants Waiting for news regarding the reduction of supply by producer countries. Today, crude oil reserves in the United States will come out, and this report may cause the range to break through. If it falls below expected, the price of raw materials will rise, and if higher — it will fall.