The risk-off mood continues today, driving stocks lower around the world. Nasdaq stocks are underperforming following yesterday’s collapse of Netflix. Demand for safe haven bonds has pulled UST 10-year yields back down to 1.77%. The dollar is mixed. Oil and gold are unchanged. China’s central bank cut another lending rate. In next week’s FOMC meeting, although no hike is expected, markets will be looking for clues for future Fed actions.
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January 21, 2022
EUR/USD 1.1347 GBP/USD 1.3562 USD/CAD 1.2538 AUD/USD 0.7198 USD/JPY 113.69 USD/CNH 6.3370 USD/ILS 3.1415 USD/MXN 20.4819 USD/CHF 0.9116 USD/INR 74.4250 USD/BRL 5.4275 USD/SGD 1.3446 USD/DKK 6.5618 USD/SEK 9.1917 USD/NOK 8.8854
The dollar is mixed overnight with the safe havens, Swiss franc and Japanese yen, outperforming and commodity-currencies, NZD, AUD and NOK, underperforming. The US corporate earnings season has been mixed, with the tech heavy Nasdaq under fire. Washington said it is allowing some Baltic states to send US-made weapons to the Ukraine, which may be rattling investors.GBP
The UK pound is lower on the back of unexpectedly weak UK Retail Sales for December. Yesterday’s Consumer Confidence in January had dropped to its lowest levels in nearly a year. Today, BoE member Catherine Mann said that she’s prepared to vote for further interest rate hikes to counter inflation she believes will stay “stronger for longer” unless the BoE acts aggressively.EUR
The euro gained some against the dollar, although there was little economic news to affect the currency. JPMorgan’s Roger Hallam said that investors would shift massive amounts of money into Europe once the ECB begins normalizing monetary policy.CAD
The Canadian dollar moved little overnight, as oil prices are essentially unchanged, and this morning’s Canada Retail Sales for November were slightly less than expected.ASIA/PACIFIC
The safe haven Japanese yen gained on the back of the risk-off mood in the markets. Today’s release of the Bank of Japan's minutes from its December meeting indicated that it is no hurry to tighten monetary policy to address inflation, as they believe that inflation is coming from rising commodity prices, and it could impact economic growth.
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