With sentiment boosted following Draghi’s comments on more possible Eurozone monetary stimulus (the third time in a year), an overnight report from the Nikkei stated The Bank of Japan were also taking a serious look at expanding its monetary easing measures. "If falling consumer prices resulting from crude's plunge are making more people feel that prices are less likely to rise, then we should consider additional easing," said a senior BOJ official.
Japan also decided to lift sanctions on Iran today following last Saturdays UN statements. A Japan-Iran investment agreement will be signed "soon" and "Japan would like to further develop its traditionally friendly ties with Iran." Oil prices at both sides of the Atlantic have rallied.
Asian stock markets and traders liked what they heard with indices rebounding, tracking the positive close on Wall Street with Australian stocks following suit, boosted by resource and energy stocks. The Nikkei is the standout performer closing up 5.88%.
The FX market adopted a positive risk sentiment as the feel good factor kicked in, albeit in a rather sedate way.
This could be brought to a sharp halt as we have an eventful day to close another volatile week; with a raft of flash manufacturing and services PMIs from across the Eurozone. While retail sales and public sector borrowing data from the UK will also keep the GBP traders busy. Apart from data, we have speeches from ECB President Mario Draghi and Board member Benoît Cœuré at the World Economic Forum in Davos, Switzerland. While BOE MPC Member Cunliffe is due to speak at the Bruegel Research Institute, in Brussels.
Looking towards the North American session, there are also plenty of risk events, with the CPI and retail sales data from Canada, while from the US, flash manufacturing PMI and existing home sales data will be reported.
Good luck and have a great weekend.
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