Craig Erlam, Senior Market Analyst at Oanda, offers insights on the policy expectations from BoE and BoJ, and discusses the technical outlook and key levels for Brent oil, EUR/USD, and USD/JPY, also joined by Mike Ingram, Strategist at BGC Partners, and Zak Mir, Technical Analyst at Zak’s Traders Cafe.
Highlights:
“Caution ahead of BOE event and Friday’s US payrolls release. Caution is also due to couple of central banks avoiding fresh stimulus, so markets remain worried if central banks will match expectations”
“BoE may cut interest rates just for the namesake since they have pushed up expectations via their dovish talk.”
“The new normal is central bank and government effort, as CB’s desperate measures are not having any effect now.”
“Brent oil – Big level broken and the market just continues to grind slowly lower.
“Not convinced about the breakout as there isn’t the regular momentum seen following breakout of major levels. We could go down to mid 30s.”
“OPEC move has failed, US oil rigs are coming back on line as they reduced their production cost and could actually produce oil at cheaper rates than OPEC members.”
“EUR/USD – Broad based dollar selling behind the rise in the EUR/USD pair. It’s a dollar driven story.”
“USD/JPY – Again a dollar driven story combined with the disappointment from BOJ and Japanese government. Looks likely we would go below 100.00”.