Can equities hang on to the early optimism this time around? So far, markets are steadier as we head into European trading but the general takeaway is that we are still just in the midst of a relief as the banking turmoil ebbs. In the bigger picture, there are still some key considerations to think about and the Fed outlook is one of them as noted here.
USD/JPY is a decent mover on the day, up 0.6% to 131.70 currently, but that comes after a slight nudge lower despite higher bond yields. So, I would argue this is merely a catch up to that as seen by the charts here:
Other major currencies aren’t doing a whole lot and perhaps with month-end and quarter-end approaching, there isn’t much appetite to chase any firm moves. I mean, this is a period where flows can go against the fundamentals so that might make things a bit messy.
Elsewhere, we saw gold drop 1% on Monday only to recover most of that decline in trading yesterday, before trading down slightly by 0.3% to $1,967 currently. Meanwhile, EUR/JPY is making a bit of a push today above its 100-day moving average of 142.50 while GBP/JPY is running into the same technical resistance on the charts now at around 162.30 on the day.
With plenty of emphasis on the bond market, yen pairs will continue to be a decent spot to sniff out opportunities. But as mentioned yesterday, it might just be a case where markets are left bouncing around in this small box until we get to the next big headline.
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