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On December 21, the United States intercepted another oil tanker off the coast of Venezuela, which the Venezuelan government called an act of piracy. Jeremy Paner, a partner at the Washington-based law firm Hughes Hubbard and a former investigator with the Office of Foreign Assets Control (OFAC), said the ship was not subject to U.S. sanctions. “The seizure of a vessel not sanctioned by the United States marks a further increase in pressure on Venezuela by Trump,” Paner said. “This also contradicts Trump’s statements that the U.S. will blockade all sanctioned oil tankers.”On December 21, Venezuelan Vice President and Oil Minister Rodríguez condemned the United States for "theft and hijacking" of private vessels carrying Venezuelan oil in international waters on December 20. In a government statement released via social media, Rodríguez stated that this serious act of "piracy" violated international law. He asserted that the colonial model the US government attempted to impose on Venezuela would ultimately fail, and that the Venezuelan government would appeal to the UN Security Council and other multilateral organizations for appropriate action.On December 21, the World Trade Organization (WTO) released its "World Trade Report 2025" on December 20, local time. The report indicates that, with supporting policies in place, artificial intelligence (AI) is expected to increase cross-border trade in goods and services by 34% to 37% and global GDP growth by 12% to 13% by 2040 by improving productivity and reducing trade costs. The report emphasizes the need to bridge the digital infrastructure gap, strengthen skills training, and maintain an open and predictable trading environment to ensure more inclusive growth.According to Business Insider, Apple has advised some employees with visas not to travel outside the United States due to embassy delays.Russian Presidential Special Representative Dmitriev: Russia and the United States are having "constructive" discussions, which will continue in Miami on Sunday.

Despite Japan's holiday, the USD/JPY has recovered to 143.00 while the Fed and BOJ remain vigilant

Daniel Rogers

Sep 19, 2022 14:48

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In spite of Monday's limited USD/JPY action due to Japan's vacation, the USD/JPY has recovered from intraday lows and is moving closer to recovering 143.00. The gold market is widely predicted to react strongly to the monetary policy meeting between the US Federal Reserve (Fed) and the Bank of Japan (BoJ) this week (BOJ).

 

Wall Street's major indexes ended the day on a down note, but the S&P 500 Futures are showing slight gains.

 

US Vice President Joe Biden's recent upbeat comments could be to blame. The head of state has also assured the public that inflation will be reduced. Covid developments from China include the unlocking of the city of Dalian in the province of Liaoning, the continued absence of coronavirus cases in Beijing, and the discovery of one such case outside of the Shanghai quarantine zone, up from the absence of any the day before.

 

USD/JPY purchasers appear to be bullish ahead of the significant monetary policy declarations due to President Biden's commitment to help Taiwan in the event that China strikes Taiwan and hawkish expectations for the Fed. It should be noted, however, that speculation over the BOJ's intervention appears to have halted the recent bull market.

 

The University of Michigan's preliminary September consumer sentiment index of 59.5 was up from the preliminary reading of 58.5 in August but still below market estimates of 60.0. The market's expectations of a full one percentage point increase in the Fed rate rose to 18% in light of the improved US statistics, while the probability of a 75 basis point (bps) boost by the Fed increased to above 80%, or 82% at the time of publication.

 

This session of USD/JPY could be slow due to the Japanese holiday and the relatively empty economic calendar. The Fed versus BOJ clash will be key for pair traders to observe this week. The economic forecasts and pronouncements of the various central bank heads are crucial, in addition to the interest rate announcements, which are generally factored in. It's possible that the USD/JPY might drop if Fed Chair Powell disillusions US dollar bulls and the BOJ shows it's willing to defend the yen through intervention.


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