US Stocks Surge Ahead of Non-Farms – Nasdaq up 1.4%
US stocks markets bounced back to life nicely yesterday as tech and AI inspired stocks drove the Nasdaq higher with the other two major indices also having good days. The Nasdaq gained 1.337% on the day as optimism around AI led to strong days for some of the major players, the S&P broke a 3-day losing streak to finish up 0.80% and the Dow rose 0.17%. FX saw the biggest volatility however as the Yen surged after the BOJ indicated that they will be raising rates sooner rather than later. The dollar overall was down 0.6% on the day and US treasury yields were little changed as most investors look ahead to tonight’s big employment data release.
Buy Yen Wear Diamonds
It is normally the dollar, but the yen took centre stage yesterday when it surged higher as the Bank of Japan Governor Kazuo Ueda hinted at a more imminent shift away from its long running ultra-low-rate policy. The yen saw its biggest one-day rally in nearly a year after comments from officials, at one point trading up over 3.8% on the day before retracing to finish the session up 2.62%. However, some traders are looking more closely at the dialogue and feel that the market may have got ahead of itself as when the BOJ talks of year end, they are usually talking their financial year (March) rather than the calendar year. This was not entirely unexpected in terms of direction but the timing certainly caught the market off guard and traders are now expecting a lot more volatility ahead for the currency into the end of the week.
All Eyes on US Employment Data Today
It has been another busy week for traders this week and it does not look like it will be a smooth run in to the weekend as volatile markets still have the big US employment numbers to negotiate tonight. The first two sessions of the day are relatively light on data releases but whippy markets from yesterday should see traders remaining on the alert. However, the big data comes out early in the US session and that could see some fireworks into the end of the weeks trading. The headline non-Farm number is expected to show a monthly increase of 184k jobs with the unemployment rate remaining steady at 3.9%, but some are putting more importance on the Average Hourly Earnings data, expecting a 0.3% m/m increase.
