USD/JPY hits 5-year high

“The goal of a successful trader is to make the best trades. Money is secondary.” - Alexander Elder

 

 

 

HEADLINES

 

 

 

• Dollar hits five-year high versus yen as Fed hikes seen on course
• EUR/DKK: Significant FX intervention in December – Danske Bank
• Oil ends up at $80/bbl as OPEC+ sticks with Feb output hike
• Gold rises as Omicron surge lifts safe-haven demand
• World shares stretch positive start to 2022
• Wall Street pares risk-taking but stays bullish
• Global equities: Positive catalysts are not exhausted – JP Morgan

 

 

 

FOREX

 

 

 

Dollar hits five-year high versus yen as Fed hikes seen on course

 

The U.S. dollar rose for a fifth straight day against the Japanese yen on Tuesday, hitting a five-year high as investors viewed the Omicron variant as not likely to derail the global economy or delay the Federal Reserve's expected rate hikes.

A rise in U.S. Treasury yields on expectations for a Fed rate hike this year have supported the greenback, with those foreseeing at least a 25-basis-point hike at the March meeting of the central bank's policy-setting committee topping 60%, the CME FedWatch Tool found.

 

EUR/DKK: Significant FX intervention in December – Danske Bank

 

The central bank of Denmark presented its December numbers. Analysts at Danske Bank point out the Danmarks Nationalbank (DN) resumed intervention with the second highest monthly purchases ever.

“The large inflow to the FX reserve will likely fuel speculation that another unilateral rate cut is coming in Denmark. However, we do not want to rush to that conclusion.”

 

 

 

COMMODITIES

 

 

 

Oil ends up at $80/bbl as OPEC+ sticks with Feb output hike

 

Global benchmark Brent crude jumped on Tuesday to $80 a barrel, its highest since November, as OPEC+ agreed to stick with its planned increase for February based on indications that the Omicron coronavirus variant would have only a mild impact on demand.

Brent futures settled up $1.02, or 1.3%, at $80 a barrel, almost back to the level they were at on Nov. 26 when reports of the new variant first appeared, sparking a more than 10% decline in prices on that day.

 

 

 

Gold rises as Omicron surge lifts safe-haven demand

 

 

 

Gold prices rose on Tuesday as demand for the safe-haven metal was boosted by worries over a surge in COVID-19 cases of the Omicron variant that could threaten global economic recovery.

The year started off with fresh record highs for equities, but since it is hard to determine whether this winning streak will continue, investors have started to go back into safety.

 

 

 

STOCKS

 

 

 

World shares stretch positive start to 2022

 

World shares extended on Tuesday their positive start to 2022 with markets from Europe to Asia shrugging off worries the Omicron coronavirus variant could choke the global economic recovery, while the dollar rose after U.S. bond yields jumped.

Travel and leisure stocks jumped 2.7%, with Ryanair (RYA) adding 8% and British Airways-owner IAG (ICAG) gaining over 9%, reflecting expectations Omicron's impact on the industry would be less severe than initially feared.

 

Wall Street pares risk-taking but stays bullish

 

Wall Street's optimistic start to the New Year pushed some stocks, oil prices and the dollar higher, but investors dialled back risk-taking elsewhere on Tuesday as data showed U.S. manufacturing slowed last month and COVID-19 spread.

 

 

 

ANALYSIS

 

 

 

Global equities: Positive catalysts are not exhausted – JP Morgan

 

“Stay bullish -- positive catalysts are not exhausted.” 

“Downside risks -- including a hawkish turn by central banks, a slowdown in China’s economy, or more significant coronavirus restrictions -- will either fail to materialize or are already priced into stocks.”

“Key calls is an overweight position on U.K. and euro-area equities, as well as on banks, miners and autos.”

“See a good entry point in emerging-market stocks, with China deceleration “by now largely behind us.”

 

 

 

CHART

 

 

 

Nasdaq 100 – Daily Candlesticks

Source: GKFX Prime Metatrader 4

NAS100 has failed to break above 16,500 or below 15,700 on two occasions as it remains in range bound trading conditions near record highs. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

 

SOURCE

 

 

 

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-dkk-significant-fx-intervention-in-december-danske-bank-202201041707
https://www.fxstreet.com/news/global-equities-positive-catalysts-are-not-exhausted-jp-morgan-202201041016
https://www.reuters.com/markets/europe/global-markets-wrapup-3-pix-2022-01-04/
https://www.reuters.com/markets/commodities/oil-prices-steady-ahead-opec-output-policy-meeting-2022-01-04/
https://www.reuters.com/markets/europe/safe-haven-gold-rises-virus-surge-sours-risk-mood-2022-01-04/
https://www.reuters.com/markets/europe/global-markets-wrapup-4-pix-2022-01-04/