Inflation arrives in Japan as well
18 November 2022
This week was not really too volatile. EURUSD stayed in the same place for the whole week. The same goes for major indices like DAX or Dow Jones. At least that was the case till today, as on Friday, indices try to pull prices significantly higher in an attempt to create a handsome weekly candle.
The Macro calendar today is empty, so that would be it for this week. Worth noticing is the data that was presented overnight from Japan. Inflation rose 3.6%, which exceeded the expectations of 3.5% and the previous reading of 3%. You remember that Japan was the country that was struggling with deflation the most and in general, recently was not touched by inflation at all. This allowed us to keep the ultra-low interest rates, despite the whole world lifting them like it was a competition or a race. Those times seem over. Inflation came to Japan and of course, the number is still low, compared to other nations but for Japan, it is significant.
The forex market remains quiet. USDJPY stays above the 139 support but buyers are giving up the gains from yesterday, which increases the possibility of a breakout. Yen strengthens actually across the whole board with the EURJPY approaching the lows of the day and CHFJPY approaching the lows of the week.
Commodities are in a bearish mood, with Gold undergoing a controlled correction. Here, in the long-term buyers have nothing to worry about, and the main sentiment remains positive. The situation is a bit different on Oil, where Brent eventually broke the 93 USD/bbl support and dropped like a rock. Currently, we are trading slightly above 90 USD/bbl but there is a potential for a bigger drop in the next weeks. In my opinion, we should easily see 8 on the front soon.