Our analysts have their fingers on the pulse of the world's financial market news.
Nikkei and Topix have been the falling stars in Asia; the yen gained against the US dollar, the euro and the pound.
If the risk aversion has got its finger in the recent yen appreciation, a decent month/quarter-end demand is also supportive of a stronger yen walking to the end of September.
Soft US yields and inert BoJ could lead to a further appreciation in yen in the short-run as the market is now trimming the short positions. A break below the 119-support could easily bring 118.30/15 (Fib 23.6% retrace on Aug sell-off) and 116.18 (Aug dip) back on the table.
This being said, the macro and real money names will soon find interest in entering long USDJPY positions on the dips, once the market is clean from the month/quarter-end yen demand.
With the deterioration in inflation expectations and the slowdown in Chinese growth, the recent appreciation in yen could easily turn into opportunity to strengthen the short yen positions – as it has been the case in the past. Given that the 120-level acts as a powerful magnet, the strength in yen could be a money spinner for the BoJ doves.
Against the USD, the yen needs to depreciate within 123-125 band to help improving the inflation expectations. Otherwise, the asthmatic Japan market will be demanding for further monetary stimulus, its inhaler. And if the BoJ leaves the yen on its own, further appreciation could jeopardise BoJ's efforts to revive inflation. While against the euro, a consolidation in 135-138 zone is possible with the increasing funding demand in the euro. In the mid-term however, a setback to 130 is a reasonable projection considering the ECB’s determination to prevent too much appetite in euro.
European markets look set to turn lower at the start of trading on Monday. The new US and Chinese tariffs take effect today so traders in Asia and Europe look cautious. Both continents are more exposed to global trade than the US. For markets, the new tariffs …Read more
Whilst risk sentiment has been healthy across the week, this swelling optimism boosted US stock markets to an all-time high overnight. A rally in tech stocks, which have done a lot of lifting for the indices over the year, in addition to fading concerns over U…Read more
Despite a shaky end to trading on Wall Street overnight, which saw the Dow gain 0.6%, the S&P just 0.1% and the Nasdaq slip by the same, Asian markets moved broadly higher on improved sentiment. European bourses are taking the lead from the US over Asia, w…Read more
Asian markets took the lead from Wall Street overnight, rallying as the latest tit for tat measures in the escalating trade spat have not been quite as severe as the markets had been expecting. Tech stocks were also heavily in demand, bouncing back after steep…Read more
Traders are faced with a sea of red in risk-off trading as markets are set to open on Tuesday. Despite the fact the market has been expecting an escalation in trade tensions between the world’s two largest economies with further tariffs from Trump; the reality…Read more
Escalating trade tensions will once again be a central theme to driving sentiment and trading this week, with President Trump widely expected to levy tariffs on a further $200 billion worth of Chinese imports, potentially as soon as today. The elevated trade c…Read more
European bourses are set to take the lead from a positive session on Wall Street and Asia overnight. A drive higher from tech stocks on Wall Street helped lift Asian equities after their recent battering, pulling them off 2-year lows.
Asian markets were endin…Read more
Today will be a busy day for traders with 2 central bank rate decisions and US inflation data all due for release within a few hours of each other. The BoE monetary policy announcement will kick things off, followed shortly after by the ECB rate announcement a…Read more