Investor Morale Has Been Shaken Once Again, RBA Meeting Minutes

FEAR RUNS THE EQUITY WORLD YESTERDAY

Yesterday, equities across the globe took a beating, as the financial world became more concerned over the Omicron variant. But probably, it is the possible responses from the governments of the developed countries, what worries investors more. The potential lockdowns and restrictions that started taking place again, are forcing businesses to re-think their strategies, in order to stay afloat. Although consumer spending has been on a rise for a few months in the developed countries, it is believed that all the recent gains could be set aside by businesses for their own contingency. This also means that business growth could suffer in the near future, and dividend pay-outs might get halted for a while. Hence we are seeing some investors taking parts of their profits off the table. That said, we are not sounding the alarm yet, as this move could just be seen as a measure of precaution and the indices may still reverse higher in the near term.

NIKKEI 225 — TECHNICAL OUTLOOK

Yesterday, the Nikkei 225 index got picked by the bulls near the 27800 hurdle and is now seen moving up again. The price is now trading above a short-term tentative upside support line drawn from the low of December 1st. As long as the index continues to trade above that trendline, we will stay positive, at least with the near-term outlook.

RBA MEETING MINUTES AND CANADA’S RETAIL SALES

Tuesday will be a bit more exciting day in regards to the economic data events. From Australia, the RBA kicked off the morning by delivering the minutes from the meeting held earlier in December. During that meeting, the Bank decided to maintain the cash rate target at 10 basis points and to continue purchasing government securities at the rate of $4bln a week until at least mid-February 2022. Australian employment looks strong and job advertisements are at their highest. Although inflation is high, it remains at maintainable levels. The Bank stated that it will keep the interest rate at the current level, until Australia’s actual inflation is sustained between the 2% and 3% target range.

AUD/CAD — TECHNICAL OUTLOOK

AUD/CAD continues to balance above a short-term tentative upside support line taken from the low of December 8th. That said, in order to get a bit more comfortable with the upside, a push above the current highest point of December would be needed, which is at 0.9232.

AS FOR THE REST OF TODAY’S EVENTS

UK will deliver its CBI industrial trends orders for December. The number is believed to have declined quite significantly, going from 26 to 13.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
JFD

JFD

JFD is a leading Group of Companies offering financial and investment services and activities.