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EUR/JPY Outlook (10 March 2022)Overall, EUR/JPY is trending downwards. Recently, EUR/JPY broke the resistance zone of 127.500. The European Central Bank (ECB) will be announcing their monetary policy decision later at 2045 (GMT+8). The central bank is expected to keep monetary policy unchanged while announcing that bond-buying under the Pandemic Emergency Purchase Programme will end this month and bond-buying under the Asset Purchase Programme (APP) will increase. The ECB may also highlight that the recent Russia-Ukraine war has added a high level of uncertainty into the economy. Hence, bond-buying under the APP may be reduced at a slower rate than the previously announced €10billion. A press conference will also be held at 2130 (GMT+8). During this time, volatility is expected in EUR. EUR/JPY’s next support zone is at 127.500 and the next resistance zone is at 128.500. Look for short-term buying opportunities of EUR/JPY.
Long
by JinDao_Tai
EUR/USD Outlook (10 March 2022)Overall, EUR/USD is trending downwards. Recently, EUR/USD broke the resistance zone of 1.10000. The European Central Bank (ECB) will be announcing their monetary policy decision later at 2045 (GMT+8). The central bank is expected to keep monetary policy unchanged while announcing that bond-buying under the Pandemic Emergency Purchase Programme will end this month and bond-buying under the Asset Purchase Programme (APP) will increase. The ECB may also highlight that the recent Russia-Ukraine war has added a high level of uncertainty into the economy. Hence, bond-buying under the APP may be reduced at a slower rate than the previously announced €10billion. A press conference will also be held at 2130 (GMT+8). During this time, volatility is expected in EUR. Currently, EUR/USD is bouncing down from the key level of 1.11. Its next support zone is at 1.10000 and the next resistance zone is at 1.12000. Look for short-term buying opportunities of EUR/USD only if it breaks above the key level of 1.11.
Long
by JinDao_Tai
Rate volatility breaks March 2020 high!Here we have the MOVE index. This expresses the volatility in bond yields, and to an extent, 'fear' in the bond market. It seems to be quite under the radar right now, but I want to outline why this is important. The index is currently above the March 2020 settlement high... And yet US equities haven't necessarily reacted to this move just yet. But we're seeing signs of stress now in the credit market... This chart is showing the BAML high yield options adjusted spread FRED:BAMLH0A0HYM2 . This is important, as it's showing the difference in yield between the treasury curve and all bonds rated BB and below, weighted by market cap... And we can currently see that this is rising, trading at the highest price since December 2020. This is where the real risk degradation will come from, and it is starting to follow the overall move in sovereign bond yields (identified by the MOVE index) as global central banks become more and more hawkish. For firms with a lot of high yield debt, this is not good, considering their margins are likely to be very thin and they could be defined as 'zombies', or firms that are only surviving because they can service their current debt levels. If this debt cost increases, they will face even more hardship. Make sure to keep an eye on both of these indices going forward.
TVC:MOVE
by FinkPro
17