US CPIs came in lower than expected today. Meanwhile, the US Justice Department is preparing to sue Alphabet (NASDAQ:GOOGL) once more about its market dominance in the ad market following a probe into whether they are using fair practices. In addition to this, Walt Disney (NYSE:DIS) is expected to release its earnings report later today.
The company’s Earnings Per Share (EPS) are expected to be $0.97 per share, which is below the $1.08 posted in the first quarter of the year. Looking at the futures market, we can see that the indices are slightly up but still below yesterday’s market open.
Crude Oil - Technical View
Oil prices continue to be influenced by tensions between the West and Russia (one of the biggest suppliers of oil) as well as the gradual increase in supply which countries have been pressuring OPEC members to proceed with to assist with the cost of living and inflation.
Goldman Sachs is one of the most recent market participants to adjust their expectations for Crude Oil from $140 to $110 in the third quarter of the year. This is a result of the deteriorating economic situation in the world, the risks of resuming coronavirus restrictions in China, where new outbreaks of the disease are periodically recorded, as well as the restoration of oil production in Russia. Many countries have been reported to have increased imports from Russia, while some European countries are rumored to have continued imports behind closed doors.
Nevertheless, despite the recent correction, experts do not exclude the resumption of the uptrend in the asset. Most economists have taken a similar stance advising that the risk of a further upward trend is still extremely high. Still, accurate predictions cannot be made until clarity is obtained on the political picture. It should also be noted that the investment bank did not alter forecasts for next year, leaving the figure at $125 per barrel.
USD/JPY - Technical View
The USD/JPY pair continues to paint an interesting picture for the market and has been one of the year's strongest and lasting trends. The bullish trend that the Dollar had been experiencing had finally fallen into a correction towards the end of the previous month. However, most economists believe that the trend has the potential to continue.
The price movement over the past week has regained some of the US dollar's lost value, and its gains are substantially larger than other major currency pairs. Though, as with most Dollar pairs, the asset was experiencing very little volatility as we edged closer to the CPI announcement, followed by a bearish breakout of the price range.
The Japanese economy has witnessed improving economic figures. However, the figures could not substantially support the Yen in the long run. This is mainly due to the pressure of inflation and the cost of living, which remains high.
And to make matters worse for the currency, the Bank of Japan is in no hurry to take measures to tackle this matter by altering the monetary policy. The regulator has remained dovish for months, advising that inflation remains a temporary problem and that little wage growth within the economy does not allow the regulator to tackle the issue.