Markets are taking a more risk-averse approach, with stock markets falling almost everywhere. The U.S. dollar is falling on fears of a recession that will force the Fed to cut rates faster.
➡️ There is growing fear in the markets that the US is approaching an economic recession, as economic data continues to show a slowdown in the economy. This is pushing US Treasury yields lower, and for the first time in two years, 2- and 10-year yields have become dis-inverted. This in turn pushes the U.S. dollar lower, with the Japanese yen gaining both as a safe haven and as a political bet on the Bank of Japan's continued retreat from its old ultra-loose monetary policy.
➡️ Stock markets continued to decline, albeit at a slower pace. The Nikkei 225 index It stands out because it dropped by more than 1.5% on the day. A recovery is possible, but markets will likely wait for tomorrow's U.S. nonfarm payrolls data before making any firm bullish moves., so it is very likely that a consolidation will take place in the US stock markets today.
➡️ In the Forex market, the Japanese yen is again the strongest major currency since the opening of Tokyo today, while the euro was the weakest, toeven if the numbers are small and therefore perhaps not significant. Traders looking to follow the yen higher would probably do well to trade both the AUD/JPY currency pair That with the USD/JPY currency pair which is near new long-term lows and is falling with strong bearish momentum. The EUR/USD currency pair remains in focus as trend traders will still be interested in being long on this currency pair above $ 1.1035.
➡️ Most commodities fell sharply yesterday. Crude oil is notable as it plunged yesterday to a new 9-month low.
➡️ Trend traders who can access the 2-year US Treasury yield should consider a short position, as we are seeing prices decline near the long-term low.
➡️ Yesterday's US employment data was significantly below expectations, reinforcing pessimism about a sharp slowdown in the U.S. economy.
➡️ The Bank of Canada cut its interest rate yesterday from 4.50% to 4.25%, as widely expected.
➡️ Three important data will be released today in the United States that could influence market sentiment:
- ADP Nonfarm Payrolls Forecast.
- ISM SME Services
- Unemployment Claims
Credit by DailyForex.com
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