Daily Market Update

No one seems to have tremendous confidence in a long-term outlook, especially as data and other developments keep surprising markets. While a group of major currencies Euro and Pound, are trending a bit downward, others have been driven upward against the buck based on idiosyncratic shocks.

In Japan, a new person had to be nominated to take the reins of the Bank of Japan after expected dove Masayoshi Amamiya refused the job offer. Meanwhile, Canada’s Employment data came in way better than expected, by ten times more than estimated, thus giving the “loonie” a boost. Meanwhile, in Mexico, the central bank acted more hawkish than economists figured.

While markets continue to figure out earnings and the impact of negative headlines in sectors like tech over layoffs, the buck is being pulled in every direction on a daily basis as uncertainty now has become acceptable while a bout of optimistic waves has taken grip across markets. It is a new dynamic, and we are here for it.

What to Watch Today…

• No major economic events are scheduled for today
• Monex USA Online is always open

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MXN ⇑

Mexican Peso strengthening came in after Banxico was shocked with a decision to hike its benchmark interest rate by 50 basis points instead of the 25 bps guaranteed by traders. Although the bank explained that it looks likely to slow down its pace later this year, officials wanted to get ahead of expected inflationary pressures and jump ahead of Federal Reserve policy. While looking contractionary, Banxico is also backed by an improved economy that also surprised last year.

 

JPY ⇑

The Japanese Yen jumped overnight after a nomination was put in for former BOJ board member Kazuo Ueda to be the next Governor following the refusal by deputy BOJ governor Masayoshi Amamiya to take on the promotion. Current head Haruhiko Kuroda has been at the job since 2013, marking the longest tenure in the BOJ’s 140-year history. With the nomination comes speculation that Ueda will be ready to change course on years of stimulus thinking and refusal to increase borrowing costs.