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On February 3rd, Apurva Sheth, Head of Market Views and Research at Samco Securities in India, stated that the market should not have miraculous expectations for a US-India trade agreement. In a report, she pointed out that the US reduction of tariffs on Indian goods to 18% is likely to significantly boost previously subdued market sentiment, as this will allow Indian products to become more competitive in the US domestic market. However, she added that exports to the US account for only a small portion of Indias $4 trillion GDP, and the related boost is expected to be short-lived. Although the Indian benchmark Sensex index rose sharply at the open following this news, Sheth believes that the stock market needs "new long positions to be established" to maintain this upward momentum.Moodys: Indias full shift to non-Russian oil could also lead to supply shortages in other regions, pushing up oil prices and ultimately causing higher inflation.Moodys: U.S. tariff cuts on most Indian goods will revive Indian exports to the U.S.February 3 - It was learned on February 2 local time that the U.S. House Rules Committee passed a government spending bill that evening with 8 votes in favor and 4 against, paving the way for ending the partial government shutdown and proceeding to a full House vote. The bill, which had previously passed the Senate, includes five annual appropriations bills and a two-week temporary funding arrangement for the Department of Homeland Security (DHS) to allow Congress to continue negotiating on immigration enforcement-related disagreements.February 3rd, Futures Market News: Zhengzhou rapeseed meal futures opened flat and then fluctuated downwards. Canadian canola futures closed lower, with the benchmark contract down 0.46%, mainly dragged down by declines in international crude oil futures and Chicago soybean oil. Rapeseed meal spot prices followed suit, with Guangxi oil mills beginning to crush Australian canola. The market anticipates a gradual easing of the tight rapeseed meal supply situation, coupled with the end of pre-Chinese New Year stockpiling, suggesting downward pressure on rapeseed meal prices.

The EUR/JPY is still firmer at 138.00 despite low rates, with inflation and the economy being the primary concerns

Alina Haynes

Aug 10, 2022 11:35

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As Tokyo begins on Wednesday, bulls on the EUR/JPY keep the previous day's gains at a two-week high while teasing the 138.00 mark. The cross-currency pair ignores Japan's Producer Price Index (PPI) information in the context of falling Treasury yields by doing this. The current lull in the pair's performance may also be attributed to investors' caution ahead of July's critical inflation data from the world's major economies.

 

Japan's PPI for July climbed to 8.6% YoY versus the 8.6% market average but was in line with market expectations of 0.4% MoM. Despite this, 10-year US Treasury rates haven't changed much over the past few days, hovering around 2.79 percent.

 

According to sources familiar with the Bank of Japan's (BOJ) thinking, the BOJ expects prices to rise more quickly than was predicted during the July meeting. This information was reported on by MNI on Tuesday. But according to MNI, "unless it helps to accelerate wages next spring, the rise in inflation to 3% or more by the end of the year will not be sufficient to induce a change in its easy policy stance."

 

The JPY appears to be impacted elsewhere by the political unrest, indicating that Japanese Prime Minister Fumio Kishida is willing to replace his cabinet. Shunichi Suzuki, the finance minister, is expected to keep his job, Reuters reports, indicating that there aren't any significant threats to the Bank of Japan's (BOJ) policies regarding easy credit. The same ought to provide confidence in JPY bears.

 

Concerns that the Eurozone may have more problems as a result of Russia's suspension of oil supplies should have had an effect on the EUR/JPY exchange rate, to name one important factor. Reuters reports that due to worries over transit payments, Russia has stopped sending oil through the Druzhba pipeline's southern section.

 

In contrast, EUR/JPY prices appeared to have been driven in recent weeks by expectations of further BOJ easing and low interest rates, as well as preparations for today's crucial CPI data from China, Germany, and the U.S. for July.