We get GDP data later today which may result in some moves on the USDollar though I think the outcome of the Opec meeting tomorrow is more important. Knowing that the oil price is incredibly important for inflation, should Opec not agree on a production cut/ freeze this would indicate that the oil price will continue to be at risk of dropping due to over supply which would be a risk to inflation. The Fed are watching this closely and it might be a deciding factor for a hike at the December meeting. So far an agreement does not seem likely though one should be prepared for anything. In the event of no cut the market may go into risk off mode which could result in a lower yield on the 10Y T-Note, a weaker USDollar and a stronger Yen. The yield has dropped slightly since Friday with the Nikkei and Dxy moving realtively sideways. Below is a technical analysis for Dxy, 10Y, Nikkei, USDJPY.
Keep in mind that a lot of the move on the 10Y yield we saw recently was on the back of Trump’s comments on fiscal spend, which is positive for inflation and therefore positive for the FOMC. Therefore anything that equals a drop in inflation could mean in a drop in the 10Y yield.
Remember – the purpose of looking at technical analysis on Dxy, the US 10Y and the Nikkei is not necessarily because you trade these asset classes but rather because they give you an indication of USDollar and Yen strength or weakness. Keeping an eye on these charts while trading Yen and/ or Dollar pairs helps you understand the bigger picture and as we know, the more information we have when making a decision on a trade, the better.