Japan inflation, is the carrytrade dead?

Important News for the day

• Fri, 23rd, 08:00 CET UK Retail Sales.

• Fri, 23rd, 14:30 CET CA Retail Sales.    

Oil prices

Positive PMI data in general helped financial markets to remain stable. In particular the data from the US currently suggests that the situation might remain positive for now until hard data might follow towards the end of the year. German numbers on the other hand still continue to offer a careful approach with in particular the PMI data in the services sector heading lower. Government debt continues to be the driver in markets. In Japan inflation seems to rise further, leaving the BoJ at a critical situation: due to the high debt they aren’t able to raise rates but would need to do so to reduce inflation. The USDJPY currency pair remains responsive and might fall further as the interest rate differential might weaken rather sooner than later.

Market talk

Stock markets continue to remain slightly shaky as new worries flare up. Renewed questions in regards to the tariffs between the US and China keep coming, which causes the focus to move towards safe assets like Gold. Also Bitcoin prices have exploded higher, breaking above the technical resistance zone at 110,000. Meanwhile the trust in the Dollar seems to get eroded further as the DXY suggests. the Dollar index might fall further showing a break of an important support zone to the downside. The weakness continues to support XAU and XAG in particular for now.

Tendencies in the markets

• Equities sideways, USD weaker, Bitcoin strong, Altcoins positive, oil weaker, Silver positive, Gold positive, JPY stronger