KBC Sunrise Market Commentary 19/01/2022 via Trader Talent

•          This morning, Asian equities join the sell-off from WS, with Japan underperforming (Nikkei -2.8%).In a briefing, PBOC Deputy Governor Liu Guoqiang indicated that the central bank will use a wide range of tools in order to support credit flows to the economy. The yen outperforms on the risk-off with USD/JPY drifting to the 114.25 area. The oil price extends its rise on headlines of an explosion affecting operations of a key pipeline between Turkey and Iraq (Brent $88/b). The US eco calendar contains the building permits and housing starts. EMU data are second tier. A risk-off sentiment currently is no good enough reason to slow the rise, especially in US yields. Even so, the pace of the move might slow as markets will look out for new guidance from next week’s Fed meeting. The technical picture for the dollar improves again. EUR/USD returned in the 1.1186/1.1386 trading range. UK CPI data published this morning mostly were higher than expected with headline CPI rising from 5.1% to 5.4%. The debate on a new BOE rate hike in February seems settled. EUR/GBP is holding near recent lows (EUR/GBP 0.8330).

This document has been prepared by the KBC Economics Markets desk and has not been produced by the Research department. The desk consists of Mathias Van der Jeugt, Peter Wuyts and Mathias Janssens, analists at KBC Bank N.V., which is regulated by the Financial Services and Markets Authority (FSMA).
These market recommendations are the result of qualitative analysis, incorporating room for past experiences and personal assessments. The views are based on current market circumstances and can change any moment. The most prominent input comes from publicly available data, financial news, economic and monetary policies and commonly used technical analysis.
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