KUWAIT: US stock markets ended Monday's session in record territory after Senate Democrats and Republicans reached a settlement to revive the US government. The S&P rose 0.8 percent for the day at 2,832.98, steered by a more than 2 percent increase in telecommunication and energy sectors. The jump in equity markets was derived after the Senate voted 81-18 to end debate and move to a vote on the funding bill helping end a three-day impasse on immigration policy that has kept federal workers at home.

The greenback was trading slight weaker yesterday, however the depreciation is limited. The single currency has been gaining momentum thanks to German politics and an optimistic Bundesbank. The EUR/USD is currently trading at 1.2260, while the euro is on the back foot versus the Sterling pound. The EUR/GBP pair is hovering around the 0.8765.

In Japan, the BoJ maintained its monetary settings yesterday and painted a more upbeat picture on price growth than the previous quarter, indicating that the Bank's perception on inflation will gradually push towards the 2 percent target around the fiscal year ending in March 2020. The BoJ stated that the economy is projected to expand moderately and it will maintain its extremely loose monetary policy as long as needed to hit its inflation target. Looking at the economic data, the economy grew for seven continuous quarters, the longest uninterrupted stretch of growth since 1994 and stock prices are at their highest in 26 years.

As for core inflation, prices rose for the 11th straight month in November and the percentage of households expecting inflation to accelerate hit a nearly two-year high in January. Overall, the perception that inflation in Japan will remain low have decreased significantly and if rates are rising in the US and Japan's economy is doing well, there will be some upward pressure on rates.

The EUR/USD pair moved up to the 1.2274 level during Monday's trading session and currently trading at 1.2259. EUR Resistance is at (1.2370-1.2410) any break above targets 1.2595. The pair is currently bullish. The USD/JPY pair moved up to the 111.22 level during Monday's trading session and currently trading at 110.79. USD/JPY Resistance is at (111.65-111.85) any break above targets 112.80 and support is at (109.65-109.85) any break below targets 108.50.The pair is currently Neutral.

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