We are closing another week and markets are mostly red. Let's cover the important moments of the week in our blog!
1- Russia - Ukraine War
We started to see mobilised soldiers in Russia and it seems that they will have 2 weeks only training and be sent to the war front in Ukraine. The main rush behind this is most probably they want to finalise something before winter colds. In February and March this year Russian soldiers suffered a lot as a result of cold weather. So Russia wants to use the manpower before the heavy winter conditions arrive.
2- FED Interest Rate Decision
FED delivered another 75 bps rate hike in September Meeting. This is the third 75 bps rate hike in a row and the fastest rate hike in US History. The FED is really committed to fighting inflation. Jerome Powell even expressed that they won't stop until they see a big decline in inflation rate. The FED will tolerate some job losses and even recession to reach %2 Inflation Target. The stock markets couldn't recover the losses after this press conference.
3 - Bank Of England Rate Decision
Bank of England delivered 50 bps rate hike in September Meeting on Thursday. Many people expected at least 75 bps as inflation is still on the rise in the UK. After disappointment in markets GBPUSD started to decline against all major currencies. This decline may just wake Bank of England officials up and they may deliver bigger rate hikes in the next meeting.
4- Japan Intervenes the FX Market
For the first time since 1998 Japan government intervened the FX Market to avoid future devaluation of Japanese Yen. Thursday morning the Bank of Japan kept ultra dovish monetary policy and the Japanese Yen tested over 145 against USD. After this sharp rise, the Japanese Government Finance ministry intervened in the FX market and USD/JPY declined to 140 level. This is not something sustainable. As long as the government deficit goes on and inflation goes up we will see the high levels in USDJPY again.
5- Crude Oil is Below $80
Recession expectations are pushing oil prices lower and today we saw %5 decline in Crude oil prices already. The FED and other developed nations' central banks are tightening the markets and a global slowdown is inevitable. This narrative is pushing commodity prices to sharper falls. As long as we have tighter monetary policies we will have lower commodity prices with a recession.
As you can see lots of things are happening in the market and you can benefit from this volatility. Start trading today with Gann Markets!!