Bearish Unwind into Thanksgiving

Summary:

Most asset classes have performed well since last Tuesday's US CPI release was soft enough to rule out any further Fed tightening. It is too early to say whether this is genuine buying of risk assets or more just short-covering ahead of Thursday's US Thanksgiving public holiday.

USD: Thanksgiving uniwnd

The dollar has fallen nearly 2% since last Tuesday's US CPI release strongly suggested that the Federal Reserve's tightening cycle was over. The dollar's decline has been broad-based, meaning that even the unloved Japanese yen has found a few friends. However, the move looks to be one of short-covering on bearish positions elsewhere in the world rather than a major re-assessment of the Fed easing cycle. In fact, short-dated US yields, which we see as key for next year's dollar decline, have barely budged over the last few days.

Given the major US Thanksgiving public holiday on Thursday, we suspect this period of position-unwind can continue a little further. Inputs into FX markets this week will include second-tier US data and the release of minutes to the 1 November FOMC meeting. Recall this was the meeting where the Fed retained its tightening bias but included an acknowledgement that tighter financial conditions were doing some of the Fed's work. The market seems in the mood to look out for some dovish headlines here, and this can prove a negative dollar event risk tomorrow evening.

DXY has decent support at 103.50, marking the 50% retracement of its rally from July. This could mark the lower boundary of this week's trading range, while the top could be the 104.40/50 area.

Elsewhere, libertarian candidate Javier Milei won a decisive victory in run-off elections for the Argentine presidency. He has run on a ticket of shrinking the government and even dollarising the economy. Given the parlous state of public finances and the very low representation of his party in Congress, it looks as though it will take some time to push reforms through. Investors and corporates will be keen, however, to see developments in the exchange rate. The official rate is ARS350/USD, the 'blue' kerb rate is ARS920/USD, and the 12-month NDF outright is around ARS1600/USD. We discussed some of the challenges to dollarisation in an previous article.

EUR: Good tidings from Moody's

The euro received some surprisingly welcome news on Friday evening when the ratings agency Moody's Investors Service raised the outlook for Italian sovereign debt to stable from negative while increasing Portugal's ratings by two notches to A3. The market had been speculating about a possible downgrade to Italy last week.

The news comes at a time when the dollar is undergoing a broad correction and has allowed EUR/USD to trade over 1.09. We see good resistance for EUR/USD at 1.0950/60 this week, and failure to break that on tomorrow's FOMC minute event risk could then see EUR/USD settling into some kind of 1.0860-1.0960 range.

Apart from the myriad of ECB speakers this week, the calendar highlight will be the eurozone November PMis released on Thursday. These have been a (negative) market mover over recent months, and our eurozone macro team sees little room for improvement here,

Thursday also sees a Riksbank policy meeting. It is a very close call, but we and a thin majority see the Riksbank hiking the policy rate by 25bp to 4.25%. This should be a mild positive for the Swedish krona.

GBP: Focus on tax cuts

Unsurprisingly, as we head into an election year, the UK Chancellor is looking at ways to reduce taxes. The focus this week is on the Autumn Statement, where we think Jeremy Hunt might have around £16bn to play with, given the better fiscal trajectory than expected. Speculation over tax cuts has centred on inheritance tax and perhaps even income tax and national insurance, which would favour workers at the lower end of the income spectrum. Our UK economist does not, however, think this moves the needle for the Bank of England rate story, where we think rates have peaked and the BoE will start easing next August.

Speculation over tax costs in a risk-positive environment should be good news for sterling. GBP/USD can push up to 1.2590, while EUR/GBP can correct back to 0.8700 this week.

CEE: Mixed picture for the FX in the region

Today's calendar is basically empty, and it won't get interesting until tomorrow. In Poland, industrial and labour market data will be published on Tuesday. Later we will see a decision from the National Bank of Hungary (NBH). We agree with the market and expect another 75bps rate cut, which was telegraphed last week by the deputy governor. Then, on Wednesday, we will see Polish retail sales. On Thursday, the Turkish central bank will raise rates again, by 250bps to 37.5% in our view. On Friday, Moody's will publish a rating review of the Czech Republic, where it has held a negative outlook for more than a year. We see some chance for an improvement to the stable outlook here.

In the FX market, the forint reacted negatively to falling rates on Friday for the first time since the last NBH meeting, closing the divergence between FX and rates. However, this week will be key for the central bank meeting and communication and maybe new headlines coming from the EU story. We could very likely see higher volatility than in previous weeks, but given Friday's depreciation, we are rather positive on the HUF. This should see it return to 376 EUR/HUF later this week.

In Poland, data this week should confirm the economic recovery, which could give impetus to markets to price out rate cuts in the short term. As we mentioned on Friday, we saw the appreciation in the last two days as premature, and EUR/PLN returned to 4.380, which we now see as fair value. But the short end of the curve, in our view, has a lot of potential to unwind some rate cuts from current expectations. This should be the main driver for PLN this week in our view, and 4.360 is thus a matter of time this week.

The Czech koruna, on the other hand, is following falling market rates, which should remain unchanged this week. The breakdown in the interest rate differential over the last two days to basically the levels prior to the last CNB meeting opens the way to EUR/CZK 24.600 in our view. And we can expect more this week after central bankers return to the headlines and re-open the question of rate cuts in December.

Risk Warnings and Investment Disclaimers

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Oil Gains on OPEC Speculation

Swissquote

Energy

The previous week marked a significant shift in market sentiment regarding Federal Reserve (Fed) rate hike expectations. The latest Consumer Price Index (CPI) update revealed a slower-than-anticipated inflation rate in the US, coupled with politicians averting a government shutdown. Despite these factors, the US 2-year yield tested 4.80% for the fourth time, while the 10-year yield briefly dipped below 4.40%. The term premium on the US 10-year paper, which surged to 50 basis points the previous month due to hawkish Fed expectations, political risks, and increased government bond supply, has nearly vanished amid the recent rally. This suggests that, at current levels, investors may require renewed conviction to sustain buying momentum.

Attention is now focused on the closely watched US 20-year bond auction, considering the recent weakness in the 10 and 30-year bond auctions. The outcome may influence a potential rebound or continuation of the rally in US bond yields. The minutes from the latest Federal Reserve (Fed) policy meeting, set for release tomorrow, will likely emphasize that the Fed's decision to pause rate hikes was influenced by the rise in US long-term yields in October. With the subsequent decrease in yields, interpretations may vary, either signaling Fed caution due to falling yields or a belief that inflationary pressures have subsided, leading to a halt in rate hikes.

All eyes on Nvidia

The S&P500 closed above the psychological level of 4500, and the Nasdaq 100 approached its summer peak ahead of Nvidia's earnings announcement. Nvidia has experienced substantial gains with expectations of a significant revenue increase in Q3. The stock price has been up 240+% since the beginning of the year, and 350+% since October 2022. The company predicted that its sales would soar to $16bn last quarter. A wide gap between demand and supply should keep Nvidia on track for extended growth. But any deviation from optimistic projections could trigger heavy profit-taking.

Elsewhere, US stock optimism extends globally, with the European Stoxx testing the 200-DMA resistance and the Japanese Nikkei reaching a 33-year high. Japan's supportive central bank, a cheap yen, and strong company earnings contribute to investor interest.

FX and energy

The USDJPY fell below the 50-DMA and the EURJPY retreated from a record high. There is one reasonable direction for the yen at the current levels: a positive correction. But no one knows when the Bank of Japan's (BoJ) astonishing push back against normalizing policy will end. Japan is expected to announce a rise in inflation to 3% this Friday.

The EURUSD extends gains above 1.09 this morning on the back of a broad-based USD selloff. The next target for euro bulls is 1.10, contingent on sustained USD weakness. However, the US dollar index flirts with oversold conditions and tests critical 200-DMA support, indicating a potential pause in the ongoing dollar selloff absent fresh news.

In energy, US crude recovers as speculation that OPEC could extend production cuts throws a floor under the recent selloff. The next OPEC meeting is scheduled for November 26th and Saudi considers doubling its 1mbpd supply cut. It's a risky move and it could go both ways. Oil prices are trending lower today because of a weakening global outlook. Therefore, whether this move – in hurry -attracts buyers or exacerbates the current global economic concerns remains to be seen. Monitoring this week's price action will provide insights into whether to sell a potential post-OPEC rally or seize opportunities on a bullish trend. If the excitement regarding Saudi doubling its supply cuts can't push the price of a barrel above $80-81pb range, it's probably better to sell the tops.

Risk Warnings and Investment Disclaimers

Dollar Weakens, Yen Strengthens, and Nikkei's New Highs

Samantha Luan

Central Bank Economic Forex

Dollar's selloff intensified in today's Asian session, underpinned by strong risk-on sentiment prevalent in the market. This move was particularly evident in USD/JPY, which saw broke through an important near-term support level around the 149 mark, signaling the prospect for further decline. Yen's strength was mirrored by Chinese Yuan, while the Australian and New Zealand Dollars emerged as the strongest performers in the current environment so far. In contrast, Euro and Canadian Dollar, despite making noticeable gains against Dollar, ranked as the second and third weakest major currencies. Sterling and Swiss Franc, meanwhile, showed mixed performance.

Another notable development is in the Japanese stock market, as Nikkei index briefly reached a new high, not seen in over three decades. This spike in the index represented an attempt to break out from a consolidation phase that has persisted for five months. Despite this bullish signal, the response from cautious investors was somewhat restrained, indicating a level of uncertainty still present in the market.

The rally in Japanese stocks was seen primarily led by financial shares, likely driven by investor expectations of a shift in BoJ longstanding negative rates policy. This sentiment could be further amplified by this week's upcoming CPI data from Japan. If the CPI data reinforces expectations of a policy shift by BoJ, it might trigger another round of buying in Japanese equities and could lend additional strength to Yen too.

This week, the spotlight in financial markets shifts to the minutes from major central banks including Fed, ECB, and RBA, along with BoE's monetary policy report hearing. Additionally, a plethora of economic data releases will be in focus, including CPI figures from Canada and Japan, Germany's Ifo business climate index, and US durable goods orders. PMI data from Australia, Eurozone, UK, Japan will also provide key insights into global economic conditions.

Technically, NZD/USD is ready for a second attempt on breaking 0.6054 resistance, after bouncing from 55 D EMA last week. Decisive break of this resistance will bolster the case that medium term corrective fall from 0.6537 has completed with three waves down to 0.5771. Further rally should then be see towards trendline resistance at around 0.6316 next. Dollar Weakens, Yen Strengthens, and Nikkei's New Highs_1

Dollar Weakens, Yen Strengthens, and Nikkei's New Highs_1

In Asia, Nikkei closed down -0.63% after hitting as high as 33853. Hong Kong HSI is up 1.63%. China Shanghai SSE is up 0.40%. Singapore Strait Times is down -0.73%. Japan 10-year JGB yield is down -0.001 at 0.747.

Yuan extends rebound after China maintains 1-yr and 5-yr LPR

As reported by the National Interbank Funding Center today, China's one-year loan prime rate retains is unchanged 3.45%. Similarly, the over-five-year LPR, a critical determinant of mortgage rates, is also steady at 4.2%.

The LPR, derived from the quotations by various banks with adjustments based on the open-market operation rates, serves as a pivotal indicator for loan pricing. This stability comes in the wake of PBoC's substantial liquidity injection of CNY 1.45 into the market through the medium-term lending facility last week, maintaining an interest rate of 2.5%.

USD/CNH extends the decline from 7.3679 to as low as 7.1696 so far. Technically, near term outlook will now stay bearish as long as 7.2684 resistance holds, next target is 7.1154 cluster support (38.2% retracement of 6.6971 to 7.3679 at 7.1117). Reaction from there will reveal whether USD/CNH is already reversing whole up trend form 6.6971 to 7.3679. Dollar Weakens, Yen Strengthens, and Nikkei's New Highs_2

Dollar Weakens, Yen Strengthens, and Nikkei's New Highs_2

Fed, ECB, and RBA minutes, alongside global PMIs, to define the week's economic agenda

This week in the financial markets, the focus is keenly set on the activities of various major central banks, including minutes of Fed, ECB and RBA. Additionally, BoE's monetary policy report hearing might provide some valuable perspectives.

Fed's minutes from the October 31-November 1 meeting, slated for an unusual Tuesday release, are expected to offer a peek into the internal debate over future rate hikes. Despite a diverse range of opinions likely to be presented, the minutes might not provide significant guidance on Fed's next steps. A critical takeaway, however, is Fed's commitment to maintaining a “sufficiently restrictive” interest rate policy for long enough to tame inflation. The ambiguity surrounding what constitutes “sufficient” and the duration of this stance leaves room for speculation, underscoring the need for December economic projections to shape further decisions.

Turning to ECB, the accounts from its October meeting are not expected to diverge significantly from the current market understanding. ECB officials have consistently communicated that maintaining the current interest rate level should, over time, return inflation to its target. However, like Fed, ECB considers discussions on rate cuts to be premature.

In Australia, RBA's recent 25 basis point rate hike aligns with expectations following robust Q3 and September CPI data. The forthcoming release of the minutes will likely provide deeper insight into RBA's decision-making process. The central bank has expressed a low tolerance for inflation surprises, indicating readiness for further action if necessary. However, any additional rate hikes are not anticipated until after Q4 data is reviewed, which is expected to be available by their February meeting.

For BoE, the upcoming parliamentary hearing will likely focus on Governor Andrew Bailey's interpretation of the recent CPI data, which came in below expectations. Bailey will likely reiterate that the UK is now in a stage of fast disinflation, but it's still soon to declare victory.

Beyond central bank activities, the week is also rich in global economic data releases. CPI figures from Canada and Japan, Germany's Ifo business climate, and US durable goods orders will be closely monitored. However, PMI data from Australia, Eurozone, UK, Japan, and to a lesser extent US, will be particularly telling. These data points are crucial in assessing the slowdown in various global economies and the looming risks of recession.

Here are some highlights for the week:

Monday: Germany PPI.
Tuesday: New Zealand trade balance; RBA minutes; Swiss trade balance; Canada CPI; US existing home sales, FOMC minutes.
Wednesday: US jobless claims, durable goods orders.
Thursday: Australia PMIs; Eurozone PMIs, ECB meeting accounts; UK PMIs.
Friday: New Zealand retail sales; Japan CPI, PMI manufacturing; Germany Ifo, GDP final; Canada retail sales; US PMIs.

USD/JPY Daily Outlook

USD/JPY's break of 149.17 support should confirm rejection by 151.93 resistance. Intraday bias is back on the downside for channel support medium term channel support at 145.80. On the downside, though, above 150.03 minor resistance will turn intraday bias neutral first.

Dollar Weakens, Yen Strengthens, and Nikkei's New Highs_3

In the bigger picture, focus stays on 151.93 resistance (2022 high). Rejection by 151.93, followed by sustained break of 145.06 resistance turned support will argue that rise from 127.20 has completed, and turn outlook bearish for 137.22 support and below, as the third leg of the long-term range pattern from 151.93. However, sustained break of 151.93 will confirm resumption of long term up trend.

Source: ActionForex

Risk Warnings and Investment Disclaimers

Japanese Stocks Party Like It's 1990

Thomas

Stocks Economic

It's been a mixed start for most of Asia in this holiday-truncated week, though Japanese shares extended their bull streak to hit highs not seen since 1990.

The Nikkei is up more than 8 per cent so far this month, and almost 29 per cent for the year so far. The broader Topix is up 26 per cent on the year but still only trades at a price to earnings ratio of 14. That compares to 23 for the S&P 500 and almost 29 for the Nasdaq.

The entire market capitalisation of the Topix is 454 trillion yen ($3.03 trillion), yet Japanese companies held 555 trillion yen in internal reserves at the end of the financial year. Half of the listed Japanese companies trade at below book value, and in aggregate hold 20 per cent more cash than their market cap.

Corporate profits ex-financials reached a record high of 32 trillion yen in the April-June quarter and recent earnings results have shown the benefit of a weak yen and the return of some pricing power after decades of deflation.

Recent surveys show inflation expectations are finally picking up which may prompt households to invest some of the 1,000 trillion yen they currently keep in cash and deposits into equities and bonds.

Japan consumer price data for October are due Friday and are forecast to show core rates moved back up to 3.0 per cent, some way above the Bank of Japan's 2 per cent target.

A strong wage round and early signs of more bumper pay awards for next year are stoking speculation the BOJ will finally unwind its uber-easy policy, and maybe even turn rates positive - a major boon for financial sector stocks.

China's central bank kept its main rates steady on Monday as widely expected, but did set another firm fix for the yuan that saw the dollar slip under 7.2000 and fall more broadly.

There were media reports Israel, the United States and Hamas had reached a tentative agreement to free dozens of hostages in Gaza in exchange for a five-day pause in fighting, but no confirmation as yet.

S&P 500 and Nasdaq futures were trading a fraction softer on Monday, but are still up sharply on the year so far driven by huge gains in the seven mega-cap darlings.

Tech major Nvidia reports quarterly results on Tuesday, and all eyes will be on the state of demand for its AI related products.

The Black Friday sales will test the pulse of the consumer-driven U.S. economy this week, while the Thanksgiving holiday will make for thin trading.

The flow of U.S. economic data turns to a trickle this week, but minutes of the Federal Reserve's last meeting will offer some colour on policy makers' thinking as they held rates steady for a second time.

Markets are clearly vulnerable to any hawkish hints given they have priced in early and aggressive easing for 2024.

Futures imply zero chance of a further hike in December or next year, and imply a 30 per cent chance of an easing starting in March. Futures also imply around 100 basis points of cuts for 2024, up from 77 basis points before the benign October inflation report roiled markets.

Key developments that could influence markets on Monday:

- German PPI for October, EU construction output

- Appearances by Bank of France Governor de Galhau, Bank of Spain Governor de Cos, Bank of England Governor Bailey

- Fed's Barkin appears on TV

($1 = 149.6200 yen)

Source: Reuters

Risk Warnings and Investment Disclaimers

Week Ahead Unveiled: FOMC, Earnings Reports, and Economic Indicators (Nov 20th-24th)

Warren Takunda

Economic Traders' Opinions

As the financial landscape enters a new week, investors brace for impactful events and data releases globally. In the United States, attention is on FOMC meeting minutes, durable goods orders, and PMIs, while a plethora of earnings reports from major companies adds to the mix. Internationally, interest rate decisions and inflation rates take the spotlight in countries like Turkey, Sweden, South Africa, Canada, and Japan. Europe anticipates flash PMIs, with a focus on Germany's Ifo Business Climate, while the UK awaits the Chancellor's Autumn Statement. Meanwhile, China monitors PBoC actions, Japan observes October's inflation, and Southeast Asian nations unveil GDP and CPI figures. It's a week loaded with insights that will influence market trajectories.

The upcoming week in the financial realm promises to be dynamic and eventful, with a plethora of key indicators and significant events shaping market trends globally. Investors are gearing up for a mix of economic data releases, central bank decisions, and corporate earnings reports that will likely impact various asset classes.

United States: FOMC Insights and Earnings Reports

In the United States, all eyes are on the release of the FOMC meeting minutes on Tuesday. Investors are eager to glean insights into the Federal Reserve's future monetary policy directions, especially amid considerations of inflation deceleration and labor market dynamics. The economic calendar is brimming with notable releases, including durable goods orders and the flash S&P Global PMI survey. Expectations are set for a 3% decrease in new orders for durable goods in October, potentially reversing a surge from the previous month. Simultaneously, PMI data for November is anticipated to reveal moderate growth in service business activity and a marginal contraction in the manufacturing sector.

While U.S. markets will experience closures due to the Thanksgiving Day holidays, the week is not short on corporate revelations. Earnings reports from major companies such as Agilent, Zoom, Nvidia, Lowe’s, Analog, Dell, Autodesk, HP, Dollar Tree, Best Buy, and Deere & Company will provide insights into the performance and outlook of key sectors.

Canada: Inflation, Retail Sales, and New Home Prices

North of the border, Canada takes the spotlight with updated data on the inflation rate, retail sales, and new home prices. These releases will be closely watched for their implications on economic health and potential policy considerations.

Europe: Flash PMIs and Economic Indicators

In Europe, attention shifts to flash PMI releases that will offer insights into overall business activity. Modest declines are expected in Euro Area, Germany, and France, with both manufacturing and services output contracting at slower rates. Germany's Ifo Business Climate is projected to reach a five-month high in November, providing a gauge of business sentiment. Other key economic indicators include the final reading for Germany's Q3 GDP, producer prices, business and consumer sentiment in France and Turkey, and Switzerland's trade balance. Interest rate decisions are on the horizon for Sweden and Turkey.

United Kingdom: Chancellor's Autumn Statement and Economic Data

In the United Kingdom, the Chancellor of the Exchequer is set to present the 2023 Autumn Statement on November 22. The economic calendar includes flash PMIs, GfK Consumer Confidence, CBI industrial trends orders, and public sector net borrowing. The manufacturing and services sectors in the UK are expected to contract at a milder pace, aligning with trends in other European countries.

Asia: Central Bank Actions and Economic Metrics

Turning to Asia, the People's Bank of China (PBoC) is expected to maintain its loan prime rates unchanged, with markets closely monitoring any potential moves. Japan awaits October's inflation print, influenced by currency dynamics, which could impact the Bank of Japan's policy stance. Southeast Asian nations, including Thailand, Indonesia, Malaysia, and Singapore, are poised to unveil GDP and CPI figures, offering insights into regional economic performance.

As the week unfolds, participants in the financial markets will navigate through a sea of information, reacting to developments and adjusting strategies based on the multifaceted indicators and events. The interplay of economic data, central bank decisions, and corporate earnings will contribute to shaping market sentiment and influencing investment decisions globally.

Risk Warnings and Investment Disclaimers

AUD/USD Hits 3-Month High Amid RBA Confidence, and Weaker U.S. Dollar Post-CPI

Forex

The AUD/USD has this afternoon surged to a three-month high at .6563, as the U.S. dollar extended its post-CPI decline.

The U.S. dollar index (DXY), faced its poorest performance since mid-July last week. The unexpected dip in the October CPI report led to U.S. rates markets anticipating rate cuts. By July 2024, 50 basis points of Fed rate cuts are priced, with 100 basis points priced for the entirety of 2024.

In contrast, last week's Australian labour force report was robust, and has raised expectations the RBA will need to hike rates early in 2024 to continue to cool the economy, and to bring inflation back to target within a reasonable time frame.

RBA vs. Fed outlooks: Australian robustness and U.S. economic softness favour AUD/USD

An extended run of resilient Australian data, up against a run of softer U.S. economic data, has shifted the respective outlooks of the RBA and the Fed (central bank divergence) in favour of the AUD/USD. Whether that run will be extended will depend on two key local events this week. The first is the release of the RBA meeting minutes from the October meeting, and a speech by RBA Governor Michele Bullock on Wednesday evening at the ABE Annual Dinner in Sydney.

What to expect from the RBA meeting minutes?

The minutes from the Reserve Bank meeting in November are scheduled to be released tomorrow, at 11.30 a.m. At its meeting in November, the RBA raised its official cash rate by 25bp to 4.35%. It was the RBA's first rate rise since June, and was widely expected.

The catalyst for the rate hike was an upgrade in the RBA's inflation forecasts to 3.5% from 3.3% by the end of 2024; and for inflation to be at the top end of the target range of 2-3% by the end of 2025.

“The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.”

While the RBA retained its tightening bias, it was watered down, providing a dovish element to the rate hike.

From

"Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve."

"Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks."

The board's meeting minutes are expected to reiterate the sentiments outlined above. They will be closely scrutinised around what options the board considered, the factors that would prompt the RBA to act on its tightening bias, and what factors might see the RBA move back to the sidelines.

AUD/USD technical analysis

After four prior rejections of the .6520/30 resistance area, we are encouraged by today's price action. However, as we noted in previous reports to confirm a trend reversal, we need to see a sustained break above resistance at .6520/30.

Should the AUD/USD still be trading above the .6520/30 resistance level after tomorrow's RBA meeting minutes, we expect the currencies to extend its gains to the 200-day moving average at .6592.

Should it then see a sustained break above the 200-day moving average at .6592, we look for the AUD/USD to rally towards the next important layer of resistance at .6800/20.

Risk Warnings and Investment Disclaimers

Latest News on the Israeli-Palestinian Conflict (November 20)

Thomas

Palestinian-Israeli conflict Latest news on the Israeli-Palestinian conflict

0:03

Houthi armed forces statement: In support of the oppressed people of Gaza, the navy of the Yemeni Armed Forces, with the help of Almighty God, conducted a military operation in the Red Sea, which resulted in the seizure of an Israeli ship and its taking to Yemen coastal.

The Yemeni Armed Forces are dealing with the crew in accordance with the teachings and values of our Islamic religion.

The Yemeni Armed Forces once again warned all ships belonging to or dealing with enemies of Israel that they would become legitimate targets for attacks by the Houthi armed forces.