Markets turned risk averse as traders await the US/UK inflation and GDP data from Japan, as well as Europe. Other than the pre-data anxiety, talks of spying via aerial objects also gained momentum and challenged the sentiment. Furthermore, hawkish comments from the Fed policymakers joined firmer US data to portray the risk-off mood.
While the aforementioned catalysts propelled the US Dollar, hopes favoring the long future of the Bank of Japan’s (BoJ) easy money policy exerted downside pressure on the Japanese Yen and fuelled the USDJPY the most among major currency pairs.
That said, the fears of higher Fed rates weigh on the prices of Gold and Crude oil. As a result, Brent Oil failed to cheer hopes of higher demand and fewer supplies.
Elsewhere, equities in the Asia-Pacific bloc trade mixed amid trader’s anxiety ahead of the bumper data week while US stock futures also print mild losses.
BTCUSD and ETHUSD, however, lick their wounds after posting the biggest weekly losses since early November.
Following are the latest moves of the key assets:
Be it the unknown object alleged to spy on the US and China or the fears of the Fed’s higher rates, the US Dollar has it all to remain firmer after a two-week uptrend. However, sluggish Treasury bond yields and a cautious mood ahead of Tuesday’s US inflation seem to probe the greenback bulls.
Elsewhere, the sour sentiment failed to lure USDJPY bears amid chatters that the BoJ’s new board has many doves who can happily favor the Japanese central bank’s easy money policy.
It’s worth noting that the AUDUSD, NZDUSD, and USDCHF managed to ignore the US dollar strength as the US rules out China’s hands in the spying over Washington.
Commodities again witness downside pressure as central banks tighten their belt amid a fresh wave of strong inflation cues and hawkish central bankers. Also, the yields-driven recession fears act as an additional negative for the commodity basket.
On a different page, optimism surrounding the increase in BTC production and hash rate contrasts with the ETH exchange outflow to confuse cryptocurrency traders.
While top-tier data are up for challenging the market sentiment during the week, Monday doesn’t have any major catalysts which could entertain the momentum traders. As a result, the markets may witness the continuation of the week-start moves ahead of the active Tuesday comprising Japan's GDP, UK job numbers and the US inflation.
May the trading luck be with you!