Global stock markets had a strong bullish day yesterday, with major indices in the US and Japan rising sharply, reaching new all-time highs.
➡️ The day just gone by was bullish for the stock markets. After closing above 20,000 for the first time on Tuesday, the NASDAQ 100 Index rose sharply to close near 20,200 and trade at a new all-time high. Even the broader S&P 500 index rose to a new all-time high. Most global stock indexes are bullish, with Japan as another protagonist, as both the TOPIX and Nikkei 225 have risen strongly today to new all-time highs, with closes looking likely very near the top of the day's ranges. These are bullish signals for stocks and trend traders will want to get involved here on the long side.
➡️ LThe Japanese yen continued to weaken yesterday, with the USD/JPY currency pair traded at a new 38-year high of ¥161.95 during the New York session before a very sharp drop occurred, likely caused by market intervention from the Bank of Japan. However, the price rebounded to recover much of this loss, but settled into a more stable, presumably somewhat bearish, price action. Trend traders will still be interested in being long this pair and/or on some yen crosses, but must accept the risk that intervention by the Bank of Japan will cause rapid and heavy losses. Vanguard sees ¥170 as a possible target if the Bank of Japan fails to raise yields soon.
➡️ Yesterday's release of the Fed's FOMC meeting minutes from the previous meeting held no surprises, with participants saying they were waiting for further evidence of cooling inflation before making rate cuts. However, Fed Chair Powell has subsequently used supposedly more dovish language on inflation since that meeting was held.
➡️ In the Forex market, the New Zealand dollar is the strongest major currency since Tokyo opened, while the US dollar is the weakest. However, the numbers are relatively small, so perhaps not very significant. It is also worth noting that the US dollar remains within a valid long-term uptrend despite yesterday's sharp loss, when it fell by the most in 3 weeks after the US services sector contracted in June, the strongest in 4 years, causing Treasury yields to fall.
➡️ Rumors are spreading that President Biden may withdraw from the presidential race, as President Trump begins to open a larger lead in opinion polls following Biden's disastrous debate performance. Betting markets suggest a likelihood of 64% retiring.
➡️ Data on the Swiss consumer price index (CPI) (inflation) will be released today, which is expected to show a monthly increase down from 0.3% to 0.1%.
➡️ The general elections will be held in the United Kingdom today, which should bring the opposing Labor Party to power for the first time in 14 years with a landslide victory.
➡️ Today in the United States (July 4th) is a public holiday, then US markets will be closed.
➡️ Yesterday's ADP forecast for change in US nonfarm employment came in slightly lower than expected, while US jobless claims data came in exactly as expected.
Credit by DailyForex.com
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