Stocks Flat as Earnings Released – S&P Off 0.15%
US Stock markets gave up earlier gains in trading yesterday to finish close to flat as Alphabet earnings beat expectations but Tesla’s number disappointed investors. The Dow dropped 0.14%, the S&P 0.16% and the Nasdaq fell just 0.06% to close a relatively subdued session. US Treasury yields drifted lower after Home Sales data and the Richmond Manufacturing Index both came in under expectations, the 2-year losing 3.6 basis points to fall to 4.487% and the 10-year dropping 1.7 basis points to 4.243%. The main mover in FX was the Yen again which appreciated against the dollar and on the crosses, while the dollar index finished the day close to flat at 104.45. Oil prices dived again as demand concerns and Gaz ceasefire hopes continue to weigh, Brent dropped 1.7% to $81.01 a barrel and WTI lost 1.8% to trade down to $76.96 by the close. Gold gained some ground to trade back to highs hit on Monday, trading at $2,410 on the Asian open.
Yen Continues to Push Higher in Early Trading
There were big moves in the Yen again yesterday as traders continued to see unwinding of carry trades ahead of next weeks Bank of Japan meeting. UsdJpy decreased nearly 1%, but more pain came on the crosses with EurJpy losing 1.27%, GbpJpy 1.2% and AudJpy 1.5%. There are some in Tokyo now pushing expectations for a 15-basis point raise next week from the central bank which would really put the cat amongst the pigeons and see even further appreciation in the home currency. UsdJpy has traded down to 155.27 this morning, which is its lowest level since June 7th and traders are expecting further volatility in the sessions ahead with the bias firmly in a buy Yen mode.
Traders Brace for Another Busy Day Ahead
Traders are preparing for another busy day ahead as they are hit by a raft of data and the latest rate update from the Bank of Canada. Flash Services and Manufacturing PMI data is due out of a plethora of jurisdictions today across all the trading sessions and traders are expecting to see volatility in markets around the tier 1 releases. In addition to the PMI data releases we have the key Bank of Canada rate decision where once again the central bank is expected to cut rates by a further 25 basis points, however Loony traders are expecting to see plenty of moves in the currency around any further forward guidance.
