In the US financial market on the 14th, government bonds fell. Strong U.S. economic data released on Monday reinforced speculation that it may be too early for the Fed to declare victory on inflation.
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 3.93%2.50.64% US 10-year bond yield 3.83%6.91.83% US 2-year bond yield 4.77%14.03.01% US Eastern Time 16:00 55 minutes
Short-term bonds were particularly sold, with yields on monetary policy-sensitive two-year bonds rising 14 basis points to 4.77%. Interest rates have fallen sharply over the past two days.
The preliminary consumer confidence index released by the University of Michigan rose sharply in July to the highest level in about two years. Short-term inflation expectations also rose.
U.S. Consumer Confidence Index Soars to Highest Level in Nearly 2 Years-Strong Labor Market (1)
“I still wouldn’t call it a ‘delivery of duty’,” said Don Lismiller, one of Strategas’ founding partners, of U.S. consumer sentiment data. “Employment remains the most important driver of consumer spending, and it remains resilient,” he said.
UBS Chief Investment Office Solita Marcelli said US economic data had been encouraging recently, increasing the likelihood of a soft landing. But they continue to favor high-quality bonds over stocks for three reasons.
“Macro positives are already priced into the S&P 500,” Marcelli said. “In the second half, we envision an environment in which inflation will continue to fall, but U.S. growth will also slow, which is good for bonds but generally unfavorable for equities. “The extent of the lagging effect of the planned rate hike is unclear, which means both a recession and monetary policy mistakes remain risks.”
US stocks
The S&P 500 stock index fell slightly. On a weekly basis, it was still the sharpest high since mid-June, and some people said that the movement of the day was a “consolidation”.
S&P 500 Stock Index 4505.42-4.62-0.10% Dow Jones Industrial Average 34509.03113.890.33% Nasdaq Composite Index 14113.70-24.87-0.18%
JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup released their second-quarter results on Thursday, which beat market expectations on the back of higher interest rates. UnitedHealth Group is up. The financial results have eased concerns about soaring medical costs. AT&T fell to its lowest level in 29 years. Concerns over rising costs weighed on the company.
Bank of America (BofA) strategist Michael Hartnett said the market’s optimism that the economy will neither overheat nor cool is likely to be short-lived.
“Risk assets are dominated by Goldilocks so far,” he said. I think about it,” he explained.
Massive inflow of funds into stock funds, stock short after summer recommended-BofA
foreign exchange
In the foreign exchange market, the dollar rose against most of the 10 major currencies. Against the yen, the dollar rose 0.8% at one point to 139.16 yen. However, if the dollar index continues at this rate, it will drop sharply for the first time in eight months on a weekly basis.
Bloomberg Dollar Index 1202.672.260.19% USD/JPY¥138.82¥0.770.56% EUR/USD$1.1228$0.00020.02% 16:50 US Eastern Time
The yen surged to its biggest weekly gain since January. At this month’s meeting, the Bank of Japan was aware of the possibility of revising its yield curve control (yield curve control, YCC) policy.
Goldman Sachs strategists, including Kamaksha Trivedi, commented on the dollar/yen, saying, “Most of the movements in the Japan-U.S. interest rate differential so far have been largely due to the U.S. real interest rate. If the market priced the scenario more fully, we believe the yen still has some upside potential ahead of the Bank of Japan meeting in July,” the report said.
“We recommend preparing for further dollar weakness over our forecast period,” UBS strategists Solita Marcelli and Marc Hoefel said in a note Wednesday. “In addition to maintaining our view of yen preference, we will raise our judgment on the euro as our most preferred currency,” he continued. We expect the euro to rise to $1.18 by June 2024.
crude
New York crude oil futures fell. In addition to profit-taking selling, the 200-day moving average weighed on the top.
The West Texas Intermediate (WTI) and North Sea Brent both rose for the third straight week as Russian crude supplies finally started to decline, adding to supply disruptions in Africa.
Russia’s oil supply finally showing signs of declining, just over four months after production cut announcement
WTI closed around $75 a barrel, up about 2% for the week. The WTI approached the 200-day moving average in April, but has not crossed it since August last year.
“Crude oil is once again facing significant resistance, with trading driven by technical factors today,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.
The New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) futures for August contract fell $1.47 (1.9%) from the previous day to close at $75.42 a barrel. London ICE’s North Sea Brent September contract fell $1.49/mt to $79.87/mt.
Money
Gold futures prices in New York remained unchanged. On a weekly basis, it was the sharpest rise since April. Gold buying surged during the week as US economic data showed inflation slowing and speculation that the US interest rate hike cycle was coming to an end.
New York Mercantile Exchange (COMEX) futures for August closed at $1,964.40 an ounce, up $0.6, or less than 0.1%, from the previous day. It rose 1.7% for the week.
Original title:Wall Street’s Reversal Curbs Bond Trader Euphoria: Markets Wrap(excerpt)
Treasuries Retreat From Rally as US Consumer Confidence Surges（抜粋）
Dollar Steadies, Set for Worst Week Since November: Inside G-10（抜粋）
Oil Drops as Technical Resistance, Profit-Taking Stall Rally(excerpt)
Gold Set for Best Week Since April as Traders See Rates Peaking（抜粋）
2023-07-14 21:00:00
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