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.
“Never let the fear of striking out keep you from playing the game.”
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.
This article is intended for U.S. audiences only.
©2022 SVB Financial Group. All rights reserved. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group (Nasdaq: SIVB). SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, MAKE NEXT HAPPEN NOW and the chevron device are trademarks of SVB Financial Group, used under license.
The views expressed in this email are solely those of the author and do not reflect the views of SVB Financial Group, or Silicon Valley Bank, or any of its affiliates. This material, including without limitation the statistical information herein, is provided for informational purposes only. The material is based in part upon information from third-party sources that we believe to be reliable, but which has not been independently verified by us and, as such, we do not represent that the information is accurate or complete. The information should not be viewed as tax, investment, legal or other advice nor is it to be relied on in making an investment or other decisions. You should obtain relevant and specific professional advice before making any investment decision. Nothing relating to the material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.
Foreign exchange transactions can be highly risky, and losses may occur in short periods of time if there is an adverse movement of exchange rates. Exchange rates can be highly volatile and are impacted by numerous economic, political and social factors, as well as supply and demand and governmental intervention, control and adjustments. Investments in financial instruments carry significant risk, including the possible loss of the principal amount invested. Before entering any foreign exchange transaction, you should obtain advice from your own tax, financial, legal, accounting and other advisors, and only make investment decisions on the basis of your own objectives, experience and resources.