Good morning traders,
In light of the meeting held yesterday by the Bank of Japan (BOJ) the Yen (JPY) did show signs of strengthening after the announced plan was reinstated to increase the monetary base by 80 trillion yen per year. Likewise, mentioned at today’s policy meeting was the optimistic view on Japans economic future recovery. The meeting also yielded news to lower the countries inflation policy for the short term. However, even though it is a short term outlook, Japan will need to face up to the fact that the inflation outlook does look disheartening. In terms of the USD / JPY making some breakthroughs this week, this will probably be up to the USD mostly as we await the data of the two-day FOCM meeting today.
Yesterday introduced the 2-day FOCM monetary policy meeting. Coming at a very curious time.
- Dual mandate of the Federal Reserve to promote full employment and stable prices
- Non-farm payrolls growing on average at almost 300k jobs appointed per month
- The falling oil price
The issue is not found in point one as the Federal Reserve has been rather successful on this front, but in the employment and inflation that are lagging with the economic indicators. Also, another non-advertised fact is that the most current measures of economic activity have taken a nosedive over the last few months. The results from Citigroup’s Economic Surprise Index showed lowering figures and measures just how low economic data has performed in relation to analyst expectations. Let’s wait and see what today will bring at the close of the FOCM meeting.
The GBP had fallen sharply last week. This is after the currency had been considered one of the strongest in the G10, however, it’s been the second weakest in the last two weeks, being a close runner up to the New Zealand Dollar (NZD).
Today is full of economic events for traders:
- The labour market and wage data
- March BOE minutes
- UK Budget announcement
- UK election
The UK currency and traders are not expecting a whole lot from the budget announcement. Chancellor George Osborne, mentioned that he will not spill any details on the Budget, and it should be expected by the nation that it will stick to being fiscally neutral with the maintenance of tightening and focus on balancing of the UK’s public books in these next few years. With that in mind, this election will probably be more geared to being politically focused as opposed to economically focused.
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Today’s Binary Trading Tip:
Seen as we have received some good news on the yen (JPY) however short lived, I am sure that with more positive feedback from traders this currency will continue on a bullish trend for a little while longer. I have decided for today to CALL the JPY. Even looking at a call on the USD / JPY. The GBP, unfortunately, I do not feel as optimistic and will drop a PUT / SELL this currency.