Stocks Hit Fresh Records After Fed Cut – Nasdaq up 0.94%
US equities surged to fresh record highs again overnight, building on the momentum from the Fed’s first rate cut of the year. The Dow closed up 0.27% at 46,142, the S&P added 0.48% to 6,631, and the Nasdaq led the way higher, jumping 0.94% to 22,470. Bond markets were also active, with Treasury yields pushing higher as weekly unemployment claims came in stronger than expected. The 2-year yield ticked up 1 bp to 3.56%, while the 10-year rose nearly 2 bps to 4.10%. The dollar also rallied, climbing 0.50% to 97.36. Commodities struggled on the day, with oil sliding further as traders priced in slowing US growth. Brent slipped 0.63% to $67.52, while WTI dropped 0.75% to $63.57. Gold also eased back into recent ranges, losing 0.42% to $3,643.48.
Bank of Japan in Focus for Yen Traders Today
The Bank of Japan is scheduled to deliver its latest interest rate update this morning in the Asian session, and yen traders are preparing for a busy day. The market is fully expecting the bank to keep rates at 0.5%; however, as always, the forward guidance in the Policy Statement and later press conference will likely spark strong moves in the currency. The main focus will be on inflation and any hints about further rate hikes, and anything more hawkish will likely see some good yen buying coming into the market. USDJPY dipped to 145.47 on the Fed rate cut on Wednesday but has since jumped nearly 2% to trade around the 148.20 level this morning. Resistance now comes in at the 200-day moving average at 148.64 and a long-term trendline just above 149.00, and traders will be looking to fade moves to those levels if we do hear a more hawkish tone today.
Another Busy Trading Day to End the Week
It looks like being a busy day to close out the trading week, with another key central bank rate call due to kick off the day and more data out later. Yen traders are preparing for a lively session with the Bank of Japan rate decision and press conference due during the Asian session. As usual, there is no fixed time for the announcement, but it usually comes out around Tokyo lunchtime. The focus will then shift to retail sales data out of the UK (exp. +0.4% m/m) this afternoon and Canada (exp. -0.6% m/m) later in the US session, with moves expected in their respective currencies. Traders will also be watching comments from FOMC member Mary Daly in the early hours of tomorrow morning, which will be closely monitored given the Fed’s move on Wednesday and political moves against the committee.
