General Market Analysis 27/05/2024
Nasdaq Surges to Fresh Highs Again – Up 1.1%
US Stock markets rebounded nicely on Friday at the end of a roller-coaster week as investors once again focused on positive data to push tech stocks higher. The Nasdaq powered up 1.1% to hit another record high and notch up its fifth straight winning week. The S&P followed in its wake gaining 0.7% on the day whilst the Dow finished close to flat. US treasury yields remained bid near recent highs, the 2-year adding 1.5 basis points whilst the 10-year dropped just than 1 basis point on the day. The dollar did take a hit, losing 0.4% on the index as traders took profit on long dollar positions into the weekend. Oil prices jumped around 1%, Brent closing at $82.14 a barrel and WTI at $77.72 and Gold traded in relatively tight ranges near its recent lows.
Yen remains in Focus for the BOJ
Talk has died down over the last week or so on intervention in the Yen market, but we were reminded again on Friday by Masato Kanda, Japan’s top currency diplomat that authorities remain ready to act on what they consider to be excessive moves in the currency. UsdJpy has crept back up from ‘intervention lows’, it is now around 3.5% higher than its 3rd May low and over 2% higher than its 16th May dip and although the move back up has been relatively gradual, its clear that Japanese authorities are still concerned. Traders are not too worried about further intervention at the current levels, but with some key data ahead this week and a lot more in the first week of June, they will be increasingly vigilant if we start to see the dollar gain ground again.
Calm Day for Markets Before the Week’s Storm Builds
It is set to be a relatively quiet trading day today with little on the macroeconomic calendar and holidays in both the UK and the US likely to dampen investor enthusiasm as well as liquidity. Traders will be aware that the event calendar does pick up in intensity as the week progresses with key inflation data ahead for several jurisdictions, culminating in the Fed’s favoured inflation indicator on Friday. For today we have already heard from BOJ Governor Kazuo Ueda, and he hasn’t substantially moved the dial in the Asian session. There is little else of note on during the latter sessions, although Euro traders will be paying close attention to the German IFO Business Climate data early in the London session and will also be on their guard for any sharp moves due to liquidity gaps later in the day with US Markets celebrating Memorial Day.
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