Spreadex Market Update
USD Falls as JPY Steals The Limelight on Surprise BOJ Action
The US Dollar continues on lower on Tuesday. A quieter session yesterday has given way to better volume today on the back of a surprise policy adjustment from the BOJ. Equities fell alongside the Dollar as global recession fears remained front of mind. On the data front today we have a quiet session with CAD retail sales the only notable print. Current themes are likely to continue across quieter pre-Christmas markets today with little to suggest a forthcoming rebound for USD.
Key Factors for Today
- USD remains under pressure as JPY steals the limelight
- Equities under pressure as recession fears take hold ahead of Christmas
- JPY rallying hard on safe-haven inflows and surprise BOJ action
- Risk FX under pressure
- Metals turning higher -crude prices stalled again
Coming Up
- CAD – Retail Sales
- USD – Housing Starts
- EUR – Consumer confidence
Equities Under Pressure Despite Weaker USD
Equities remain under pressure across the board today. The latest wave of central bank tightening last week is keeping equities sentiment skewed lower for now. Those calling for a Santa-rally have been left empty handed this year it seems. No doubt, last week’s negative US retail sales reading has compounded fears of much-weaker-than-expected holiday activity. In the UK, extreme bad weather and industrial action have rattled the retail and
hospitality sector before Christmas leading to mass cancellations of bookings as well as staff shortages and business disruptions.
JPY Boosted by Surprise BOJ Action & Risk Off Moves
In FX, JPY has taken centre stage today with a combination of risk aversion and surprise BOJ policy tweaks helping drive inflows for the yen. The BOJ widened the band on its yield targeting rate by 0.25% and announced an increase in bond buying, effectively amounting to an unplanned bond purchase operation.
High -Beta FX Struggling
Risk FX have been among the weakest performers today with AUD and NZD heavily hit by the drop in stocks and commodities. These moves come despite weakness in the US Dollar which remains under pressure today.
Metals Higher, Crude Still Stalled
In the metals and commodities space, both gold and silver are seeing better buying action today, propped up by a weaker US Dollar and the downside action we’re seeing across the board in stock markets. With USD likely to drift lower over today, both metals should find higher prices across the session. Crude prices are remaining lacklustre today. The market has seen fairly muted action so far this week. Though a weaker US Dollar is offering some support, the broader
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