2025 Market Outlook: Key January Events to Watch 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
Morgan Stanley Downgrades Tesla as AI Growth Expectations Rise 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
China’s Growth Faces Structural Challenges Amid Doubts Over Data 
European Stocks Rally on Chinese Growth and Mining Merger Speculation 
Stock Futures Dip as Investors Await Key Payrolls Data 
Market Driving Forces for the Day: Euro seems to have been momentarily cushioned by Italy news, Italy-Germany yield differential in focus for further direction.
While politics continue to be an eye-catchy news for the financial markets with the Italian-EU budget clash ahead of the official budget submission to the EU on 15thOctober and the prevailing UK Conservative Party Conference, that concludes today. The Italian government has agreed a draft budget deficit of 2.4% of GDP for 2019. Financial markets have responded by selling the euro and risk assets with the Italian stock market off 5%.
While PM Theresa May is scheduled to speak today. Italy's finance minister Tria is due to speak at 11:30 and Deputy PM Salvini at 15:00 CEST.
Furthermore, in the Euroarea, the important data announcement is scheduled for the day, PMI service index (German, Spanish, Italian, and French PMI flashes) are due out at 10:30 CEST. Consensus have been such that the growth remains subdued.
Although EUR/JPY has been attempting to show support at 21DMAs, the major trend still seems to be edgy at 133.131 (which is near 61.8% Fibonacci retracements from the June lows. For more details of trend analysis of this pair, refer our technical section.
FX Derivatives Trade Tips (EURJPY):
Keeping above data events into the consideration, we advocate deploying below derivatives strategies on hedging grounds:
- Buy 2m EURJPY ATM -0.49 delta puts for aggressive bears on hedging grounds. If expiry is not near, delta movement wouldn’t be 1 point increase with 1 pip in the underlying spot FX. Which means if the spot FX moves 1 pip, depending on the strike price of the option, the option would also move less than 1.
- Buy 2M EUR puts/JPY calls vs. sell 2M 28D EUR puts/KRW calls for directional traders.
- Alternatively, ahead of PMI data announcement today, we advocate shorts in futures contracts of mid-month tenors with a view to arresting potential dips.Source: sentrix, saxobank
Currency Strength Index:FxWirePro's hourly EUR spot index is flashing at 20 levels (which is mildly bullish), while hourly JPY spot index was at -24 (mildly bearish) while articulating at (07:02 GMT). For more details on the index, please refer below weblink:
