Tech Rally Spurs US Markets – Nasdaq Jumps 1.5%
Asian markets are set to open with fresh impetus this morning after US markets shrugged off recent poor sentiment and higher yields and bounced strongly on the first trading day of the week. The tech heavy Nasdaq led the way, closing up 1.56%, followed by the S&P, up 0.69% with the Dow dropping 0.1% on the day. The move in the Nasdaq was heavily influenced by a surge of 8.5% in tech giant Nvidia and places even more importance on its earnings report on Wednesday. Things weren’t as rosy in other products as US treasury yields once again drove higher with the 10-year hitting levels not seen since 2007 and the dollar remains on the front foot across the FX spectrum.
Yen Bears Are Grinning Again – 150.00 in Target
Currency market volatility has picked up over the last few months and in the majors, the Yen has been the standout underperformer. Interest rate differentials are really starting to kick into the market and as currencies hit fresh highs – and lows – traders are taking opportunities as pairs enter new ranges. The Yen has been on the receiving end of a lot of negative flow in the last month with USDJPY threatening to break into fresh multi-year levels. We’ve have already seen multi-year lows for the currency against other majors including the Euro and Sterling and it looks set to follow suit against the greenback. Traders are bracing for more volatility as we are hearing the usual talk of intervention and ‘smoothing action’ as these new levels are hit.
Traders Bracing for Another Busy Day
It is quiet day ahead for investors in terms of the economic event calendar with nothing in the way of tier 1 data set for release in either the Asian or European session, but traders are bracing for a busy day on the back of strong moves in the US overnight. EM traders will be paying close attention to updates coming from the BRICS (Brazil, Russia, India, China, and South Africa) summit taking place in Johannesburg over the next few days. The US session does see a bit of action in terms of data releases and central bank chat as we have the US Existing Home Sales and Richmond Manufacturing numbers out as well hearing from FOMC members, Goolsbee and Bowman later in the day.
