The USD fell the most in two weeks in Asian/European trading, with the JPY gaining more than 1% at times against the other currencies after the Bank of Japan hinted at an end to ultra-accommodative policy. USD strength also eased slightly after data from China showed signs of stabilization (which also supported the yuan) and U.S. Treasury Secretary Janet Yellen expressed confidence that the U.S. can contain inflation without causing major damage to the U.S. economy or labor market.
The pause in USD strength is providing some relief on Wall Street. We see tech stocks, which sold off heavily last week, higher in the pre-market gains. Tesla leads the pre-market gains, trading more than 6% (!) higher after an upgrade from Morgan Stanley.
We have a quiet start to the week, but with some important data/events coming up, such as the US Consumer Price Index data on Wednesday, which will influence expectations on the Fed rate outlook, and the ECB rate decision on Thursday.
The weaker USD has helped stabilize commodity prices, although oil prices are little changed and below last week's highs due to some technical selling. We expect oil prices to continue to rise – signs of further declines in US inventories will continue to paint a picture of tight oil supplies.
We see riskier currencies in rebound mode for most of today. The JPY lost most of its gains after Bank of Japan Governor Kazuo Ueda hinted that ultra-loose monetary policy could come to an end in the next three to four months. However, the JPY will continue to benefit from signs that interest rate differentials are no longer rising and the chances of monetary policy normalization by the Bank of Japan are increasing.
We expect equities to perform positively today, with trading volume remaining relatively light. Tomorrow's ZEW sentiment data will likely put pressure on German and Eurozone equities again.
👁 ROB'S MARKET OVERVIEW:
September 11, 2023 (🇺🇸🕊)
🇺🇸 US Markets ↕️/↗️
Cyclical Stocks ↕️/↗️
Tech/Growth Stocks ↗️ (rising / sideways in second half of us trading)
Financial Stocks ➡️/↗️
Defensive Stocks ➡️
Energy Stocks ➡️
Materials Stocks ↗️
GBP, JPY, CAD ➡️/↗️
EUR, CHF ➡️
USD ➡️/↘️ (Stabilizing in second half of US trading)
⚒ Commodity Markets ↕️
Oil prices ↘️/➡️/↗️ (remaining supported and recovering from slight losses)
Natural Gas prices ➡️/↗️
Metal prices ↗️/➡️ (litte additional gains during US trading)
Precious Metal prices ↗️/➡️ (USD will stabilizing during US trading, which limits additional gold gains)
⚡️Cryptos ➡️/↘️ (cryptos remain unattractive)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)