US Stocks Gain on Tesla and Powell Chat – Nasdaq up 0.8%
US stock indices pushed higher in trading again yesterday as sold Q2 delivery data from Tesla and slightly dovish comments from Fed Chair Jerome Powell hit markets. The Dow gained 0.41%, the S&P 0.62% and the Nasdaq once again led the way, closing up 0.84% on the day. US Treasury yields and the dollar edged lower, the 2-year off 3.1 basis points to 4.741% and the 10-year dropping 3.7 base points to 4.442%, while the dollar lost 0.1% on the index with the UsdJpy still sitting near recent historic highs. Oil prices dipped as fears of output cuts from hurricane Beryl receded, Brent off 0.42% to $86.24 and WTI down 0.68% to $82.81 a barrel. Gold also remained in recent ranges, losing 0.3% on the day to close at $2,324.
Intervention Threat Steps up in Next Couple of Days
FX traders have been on the alert for intervention in the Yen for the last couple of weeks as the Yen continued to depreciate against the dollar and other major currencies, and although the move has been relatively smooth and backed by the underlying fundamentals, the Japanese authorities have made it known that they are monitoring the situation closely and are prepared to act. Experienced traders are aware that the Bank of Japan likes to get ‘bang for its buck’ and the upcoming US July 4th holiday could provide the perfect conditions for some decisive action. There is a raft of US data due out tonight and if it pushes the dollar higher, we could see intervention hit the market as liquidity things in the late New York session. The same argument can be made for Thursday and Friday in that New York trading day when desks will be operating on skeleton staff as traders take advantage of an extra day off to make a long weekend, this will be particularly so after Non-Farms on Friday -especially if we get a stronger print.
Huge Day Ahead in US Markets Today
The July 4th holiday tomorrow has caused a long jam of data updates for today’s US trading session, and this combined with thinning liquidity conditions is likely to make for a lively session in New York today. The Asian session see’s the early focus on the Australian market for the latest Retail sales release, but there is little of note on the calendar for the rest of the day and there is nothing major scheduled in London today either. However, a plethora of data hits will come once New York opens with the ADP Non-Farm Employment Change, Unemployment claims and ISM Services PMI number all due to be released. On top of this data dump we also have the small matter of the FOMC’s latest Meeting Minutes to deal with towards the end of the session as well, when liquidity will be dropping swiftly as US markets look ahead to hot dogs and fireworks – Could be a great time to act if you happen to be a central bank that wants to influence its currency.
