QUICK TAKE: US Dollar and Japanese Yen in Demand as Market Sours
Equities: With Biden’s stimulus package announcement and Fed Chair Powell now out the way, upside in the equity market looks somewhat exhausted (possibly a sell the news pullback). European bourses are posting modest losses which extended slightly following weaker than expected US retail sales, which also comes on the back of yesterday’s soft initial jobless claims data. That said, US futures have been heading lower into the Wall Street open.
Euro Stoxx 50 Sector BreakdownOutperformers: Healthcare (+0.2%), Financials (-0.1%) , Utilities (-0.3%) Laggards:, Consumer Discretionary (-1.4%), Real Estate (-1.4%), Industrials (-1.2%)
Intra-Day FX Performance
FX: Overall, price action in the FX space has been somewhat uninspiring with major pairs continuing to trade in choppy fashion. That said, with a slight risk-off tone, safe-haven flows have benefitted the Japanese Yen, alongside the US Dollar. In turn, the latter is nearing weekly highs at 90.73, however, with Fed Chair Powell yesterday re-enforcing the accommodative stance and downplaying talk (ignited by Bostic) of tapering QE purchases, the move higher in the USD may see market participants look to fade the move.
Chart to Watch
AUD/USD Chart: Daily Timeframe
As risk sentiment dips, AUD/USD has edged lower to test key support, in which a break below the 0.7680-0.7700 zone opens to door towards 0.7640. More on the Australian dollar here
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