Author: FX

Despite 2022’s drawdown, analysts at Barclays believe that global equity markets have room to drop further.  Cash should be the real winner of 2023 “We observe that US stocks tend to bottom out 30-35% below peak in the middle of a recession. That suggests fair value of 3200 on the S&P500 sometime in H1 23. European valuations look more reasonable, but that is offset by a considerably worse macro outlook than in the US.” “Bonds have massively underperformed equities in 2022, and our analysts now see limited downside in longer US fixed income. If forced to choose between stocks and…

Japanese yen extends gains across the board on Friday. US Dollar up for the day, sharply lower for the week. USD/JPY drops for the second day in a row. The USD/JPY is falling sharply for the second day in a row and it is trading under 128.00 at the lowest level since late May of last year. The decline takes place even amid a modest recovery of the US Dollar following Thursday’s slide after US CPI data. After a short-lived recovery, USD/JPY resumed the downside, breaking below 128.00. As of writing, it is trading at fresh lows at 127.70/75, as…

Consumer confidence in the US continued to rise in early January. US Dollar Index holds in daily range above 102.00 after the data.  Consumer sentiment improved in the US in early January with the University of Michigan’s (UoM) Consumer Confidence Index rising to 64.6 from 59.7 in December. This reading came in better than the market expectation of 60.5. “Year-ahead inflation expectations receded for the fourth straight month, falling to 4.0% in January from 4.4% in December,” the UoM noted in its publication. “The current reading is the lowest since April 2021 but remains well above the 2.3-3.0% range seen…

This survey is nothing more than a barometer of political sentiment and gasoline prices. That said, the Fed watches the inflation number closely and it was a contribution to the sudden switch to more-aggressive hiking in June (which is funny because it was later revised down).The one-year number will certainly be welcome while the 5-year number is back to where it was for months.Five year inflation expectations Source link

USD/JPY accelerates the downfall to 128.00. The pair could dive as low as 124.00, economists at Société Générale report.  Channel at 134/134.80 should cap short-term upside “Daily MACD has flattened recently however signals of an extended bounce are not yet visible.” “The pair is likely to drift towards next projections at 128 and 126.80. Peak of 2015 near 125.85/124.00 could be the next significant support zone.” “The channel at 134/134.80 should cap short-term upside.”  See: USD/JPY looks set to challenge the 126.50 mark – ING Source link

The index reverses part of the recent acute sell-off. US yields remain directionless across the curve on Friday. Flash Michigan Consumer Sentiment will be next on tap. The greenback’s recovery picks up extra pace and revisits the 102.65/70 band when gauged by the USD Index (DXY) on Friday. USD Index meets contention around 102.00 Following the earlier retracement to levels just below the 102.00 mark, the index manages to regain some composure and advance to the 102.60 region on the back of the profit talking sentiment in the risk complex. In the US money markets, yields across the curve advance…

In the view of economists at Wells Fargo, end to monetary tightening should bring the US Dollar’s gains to an end by early 2023. Eventual US recession to soften the greenback “An end to rate hikes will coincide with an end to USD gains during early 2023. Indeed, we believe a peak in the trade-weighted US Dollar for the current cycle has already been reached.” “Over time, we forecast a trend of USD depreciation to gather pace. Initially, that depreciation may be modest during the latter part of 2023, as the US economy falls into recession while other international economies…

Bank of Korea (BoK) decided to hike its policy rate today by 25 bps to 3.50%. Economists at TD Securities expect the Won to strengthen in the weeks ahead. Less urgency to tighten further “BoK hiked its 7-day repo rate by 25 bps to 3.50% as widely expected. The decision was not unanimous however, with two members opposing the decision voting for rates to remain on hold.” “While there was no clear signal that BoK has reached terminal we think the bar is high for another hike in the months ahead. Weakening growth, eating inflation pressures and a stronger KRW…

China FX has front-loaded the China reopening and economists at Société Générale are cautious about chasing a CNY rally. Neutral on Yuan “As USD/CNY has already reversed more than 50% of the rise in 2022, it would be necessary to feed more positive surprises to the market to deepen a CNY rally to the 6.30 level, but we are sceptical.” “Our year-end USD/CNY forecast of 6.80 incorporates a ‘gradual’ turnaround in major policies including Zero-COVID. However, nearly all major policies that were seen as negative to the market have been reversed in the past two weeks.” “The FX market has…

EDU, FUV and NCTY are among pre market gainers Source link