Dow Jones lifts, propelled by Powell’s comments

Fundamental outlook

FED chair Jerome Powell commented that policymakers will be patient in terms of tightening rates, quelling fears of a possible rapid rate increment in the near future. On Friday, the Dow Jones market surged 800 points through the mid-day session.

US Secretary of Defense Jim Mattis tendered his resignation and is expected to leave the Trump administration by the end February. However, President Donald Trump instructed him to leave two months in advance, by the end December. Market economists are generally concerned about Trump’s erratic and egregious behaviour as there is no longer a senior ranked official staying in the White House.

After the US Government shut down since before Christmas, the House finally passed a Bill on Friday to fund eight Government Departments through to September.

However, the budget does not include the funding of the border wall as proposed by President Trump. It is still unclear now if Trump will approve of it or the House could get enough bipartisan votes to override the President’s veto.

The US economy saw an increase of 312,000 jobs in December, above median forecast.

China announced the cutting of banks’ reserve requirement ratio (RRR) by one per cent in January, in preparation for a possible economic slowdown and mounting pressure from the US tariff. The current RRR for large banks is 14.5 per cent and small banks at 12.5 per cent.

Technical forecast

US dollar/Japanese yen took a dip last week to a 10-month low at 105 as the dollar fell. The market rebound to 108.50 on Friday and remained there until a possible clearer trend in the coming week. We reckoned the trend has spearheaded into a bear sentiment and will drive lower in the coming weeks. Resistance will be strong at 109 region while first support lies at

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