[Mercato USA]Small rebound in stocks, future awareness of US monetary policy – 143 yen sandwich – Bloomberg

The US stock market rebounded slightly on the 14th. The directionless development was conspicuous, but it was carried to the end. Investors are trying to gauge the future of US monetary policy. On the foreign exchange market, the yen recovered from the weak level of the yen and the strong dollar for the first time in around 24 years and moved around 143 yen per dollar. In the US Treasury market, the reversal of long and short-term interest rates has further progressed.

The S&P 500 index fell the day before, the largest drop in nearly two years, following the surge in the US consumer price index (CPI) in August. After repeated ups and downs on this day, at the end of the day there was a buy deal to secure positive territory. The volume was approximately 20% above the 30-day average.

The S&P 500 was up 0.3% to 3946.01. The Dow Jones Industrial Average rose $ 30.12, or 0.1%, to $ 31,135.09. The Nasdaq Composite Index rose 0.7%.

“Investors are trying to figure out if anything changed yesterday, and it’s a tug of war,” said Brent Shutt, chief investment officer at Northwestern Mutual Wealth Management. Markets are focused on upcoming inflation data and next week’s Federal Open Market Committee (FOMC) meeting.

“The fact that stocks failed to break out of the morning highs must be disappointing for the bulls,” said Matt Maley, Miller Tabak’s chief market strategist. “The market always seemed to recover quickly during the summer dips.

In the US Treasury market, the reversal in yields between 2- and 30-year bonds temporarily increased to over 33 basis points (bp, 1bp = 0.01%). Reverse yields above this level date back to 2000. At 4:25 pm New York time, the 10-year Treasury yield was broadly flat at 3.41%. Yields on two-year bonds increased 4 basis points to 3.79%.

Reversed 2-year and 30-year US bond yields temporarily expand to over 33bps, the largest in this century

The yen rose on the foreign exchange market. In the early morning of Tokyo’s 14 trading hours, the dollar was approaching 145 yen for the first time in about 24 years. During the period, the price fluctuated around 143 yen.

“In the short term, more in practice, the threat of physical intervention is likely enough to keep the dollar / yen exchange rate below ¥ 145,” said Adam Cole, chief currency strategist at RBC Capital Markets. Let’s go, “he stressed.” However, once the spot price consolidates at 140 lows for a few weeks, that level becomes less important and the risk of our modeled interventions decreases as momentum weakens. “

Finance Minister Shunichi Suzuki told reporters on the night of the 14th that he would not intervene in the foreign exchange market as a preliminary announcement, but that if he did, he would do so “immediately”.to keep the yen from depreciatingdone.

“Forex intervention could, if timely, push the yen back 3% to 5% in the short term,” Scotiabank’s Sean Osborne wrote in a statement.

The dollar lost direction over the course of the day, with the Bloomberg Dollar Spot Index showing the dollar’s movement against the 10 major currencies, down 0.2%. As of 4:25 pm New York time, the dollar fell 1% against the yen to 143.16 yen. The euro was up 0.1% against the dollar to $ 0.9978 per euro.

Crude oil futures in New York rebounded. The prospect of loosening the blockade in China’s megacity, Chengdu, to fight the novel coronavirus has helped oil prices. Chengdu authorities said Wednesday in a statement that the blockade has been reintroduced in some areas since Thursday.reliefHe said he was going to start. He bodes well for demand in China, one of the world’s largest oil consumers.

When crude oil prices dropped to around $ 80 a barrel, the US administration decided to expand the Strategic Petroleum Reserve (SPR).SupplySpeculation that it will begin has also pushed crude oil prices higher. Portfolio manager Tortoise Matt Sully said oil prices could bottom around $ 80 a barrel and rise to around $ 100 a barrel if the US administration starts replenishing the SPR.

The West Texas Intermediate (WTI) futures contract on the New York Mercantile Exchange (NYMEX) for October closed at $ 88.48 a barrel, up $ 1.17 (1.3%) from the previous day. November delivery of London ICE North Sea Brent increased 93 cents (1%) to $ 94.10.

The New York gold market continues to decline. December gold futures on the New York Mercantile Exchange (COMEX) closed 0.5% lower at $ 1,709.10 an ounce.

Gold prices have followed a bearish trajectory in recent days as interest rates have risen against the backdrop of the Fed’s aggressive stance. “Gold will largely be on the defensive this year and into the next year as the Tighter monetary and fiscal policy “puts pressure”, “James Steele, chief precious metals analyst at HSBC Securities in the United States, wrote in a statement. “The recent tightening should continue and will further weigh on gold,” he said.