Volatiliteten er vokset så kraftigt den seneste tid, at dollaren er presset op på sit højeste niveau i fem år, skriver Saxo Bank. Mange investorer flygter fra risikable investeringer ind i dollar-aktiver. Der er også svingende signaler om amerikanske virksomheders indtjening, men generelt synes resultaterne i første kvartal at være bedre end frygtet. Der er også kommet beroligende signaler fra Kina om nye politiske stimuli til økonomien.
Bank of Japan’s push higher to USDJPY; Flight to safety keeps USD on a rampage; Equity markets calm before Apple earnings and US GDP today
Summary: The daily unlimited bond buying from the Bank of Japan has opened up the doors for further yen weakness. Market volatility has surged back to its highest level in almost a month, and investor bunker for safe havens is sending the US dollar index to a 5-year high. Equity markets remain supported by mixed US tech earnings and China’s policy support, and eyes are now on Apple earnings along with US GDP release.
What’s happening in markets?
Mixed earnings results overnight, amid a disappointing quarter. But markets holds breath for Apple (APPL) earnings tonight. On Wednesday Boeing (BA) reported weaker than expected earnings ($1.2 billion loss, which was more than expected) and its shares sank over 7%, capping gains in the Dow Jones. While after hours, in the positive corner, Facebook parent Meta (FB) reported better than expected results and its shares rose 18% aftermarket. Meanwhile, Ford Motor Company (F) also delivering better than expected results afterhours, sending its shares up 4% aftermarket. All in all, this quarter, earnings are far below historical average, of 10% Q2 earnings, and S&P500 earnings are just 0.9%. Energy stocks continue to deliver the best earnings growth and outlooks.
Asian equities relieved by stability in Wall Street and more China support measures. Equity markets in Asia started the day on a positive note, even as flight to safety continued overnight. Japan’s Nikkei (NI225.I) was in gains ahead of the Bank of Japan monetary policy announcement, led by industrials and gas utilities and while Singapore’s STI Index (ES3) was steady.
Additional pledges of supports to economy helped stabilize equity markets in mainland China and Hong Kong. In addition to President’s Xi’s push for more infrastructure spending, yesterday we also had the Standing Committee of the State Council pledged to stabilize employment and the economy as well as the smooth operation of transportation and logistics with a series of measures including waiving taxes on delivery platforms and RMB100 billion loans to support the transport and logistics industries. E-commerce names gained. Alibaba (09988), JD.COM (09618), Meituan (03690) were up 1% to 3%. The broad markets failed to follow through more from yesterday’s rally and have been treading water this morning.
The Australian share market’s ASX200 is up 1% Thursday supported by; better than expected Australian quarterly results and by stimulus talks in China, boosting commodity prices. Iron ore extended its rebound with BHP, rising 3.4%. As for earnings buoyancy; Fortescue (FMG) shares rose 4.9% on better than expected 3Q shipments and guidance ahead. Importantly iron ore majors like BHP and RIO have re-entered their long-term rebound. Sandfire (SFR) shares charged 13% on upgrading copper forecasts. While Australia’s biggest lithium company, Pilbara Minerals (PLS) reported it will meet this years guidance forecasts despite covid staff shortfall. The local lithium giant, also guided for another step up in the lithium price and PLS shares rose 5% At Saxo, we remain bullish on industrial metals, and minerals.
BOJ remains dovish, sending USDJPY towards 130. USDJPY rose over 1% to highs of 129.87 as the Bank of Japan strengthened its defense on the rising yields. Yield curve control was maintained, as was the sale of its asset purchases. BOJ unveiled unlimited daily bond buying to cap 10-year yields at 0.25%. The move suggests acceptance of yen weakness, giving it room to go further, and rising inflation in the hope it will bump up wages.
Rampant dollar dominance continues. The DXY index has surged to two-decade highs amid risk off. Energy crisis batters the EUR which was seen below 1.0550 in the Asian session again, after reaching a 5-year low overnight. ECB President Lagarde yesterday committed to deliver on the 2% inflation target over the medium-term. The NZD is still under pressure, and the AUD is down despite yesterday’s much higher than expected CPI numbers and revised expectations for sooner and faster rate hikes from the Reserve Bank of Australia.
EM currencies face a host of headwinds. EM currencies held up earlier this year despite inflation pressures and a hawkish Fed tilt. But the MSCI EM Currency Index has now slid to its lowest levels since December 2020 amid further headwinds from energy and food prices as well as lockdowns in China. USDCNH is now heading back towards 6.60, weighing on KRW as well which is down over 4% against the USD this month. Meanwhile, USDTHB is near 5-year highs while USDIDR is heading to 14500. Commodity exporters like BRL have also lost their shine amid the recent pullback in oil prices.
