Crypto holds on to its gains

This Daily Digest will cover:

• 🪙 Crypto holds on to its gains
• 🇯🇵 BOJ leave policy unchanged
• 💶 Euro rate hike path questioned?

Yesterday saw the Euro as the big mover when a report emerged that the ECB were discussing reducing the flagged rate hikes in March.

Euro slid from 1.0870 to 1.0767 overnight before ECB member Villeroy spoke early today to say the March rate path was still valid. We have unwound most of the sell off but for me this sort or flip flop communication generally has a seed of truth so I suspect a period of under performance from the Euro could ensue as the market prepares for the February meeting and press
conference.

Crypto markets remain quiet with BTC attempting to vault 21,500 unsuccessfully thus far. I continue to be impressed with the resilient tone across the board and barring a more sweeping setback in risk assets I am happy to continue to buy any dips. The big event flagged yesterday was the BOJ CB meeting and whilst it did not deliver in terms of policy changes it did in terms of volatility. USD/JPY has moved from 128.50 to 131.58 before selling off to 129.50. Thankfully we squared our yen cross shorts yesterday
and I am reluctant to put them back on yet. The story remains valid but I feel the trade has been pushed back for a while.

Today brings US PPI and retail sales and expect to see a continuation of the falling inflation theme, that is unless you are in the UK where it continues to sit above 10%!

Good luck as always.