Investors are pricing in coming economic events. The Japanese yen is gaining ground against major currency pairs while the recent Xi Jinping speech on the occasion of China’s 40th anniversary of Reform and Opening did not reassure investors that further reforms would be implemented. US futures are stabilising after a sharp drop Monday, while Asian and European shares remain red across the board.
Japanese Topix and Nikkei 225 indices are trading at May 2017 and March 2018 lows, closing today’s session at -1.99% and -1.82%, while Euro Stoxx 50 is down 0.50% at opening.
As the US Federal Reserve meeting approaches, followed by the Bank of England, the Bank of Japan and others (6 central bank rate decisions in total), equities will be volatile this week.
EUR/USD is currently trading at 1.1375, approaching 1.1390 short-term amid expectations of a more dovish Fed following Wednesday’s FOMC meeting.
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By Vincent Mivelaz