_edited_edited.png)
Market Update: Bank of Japan (BoJ) Keeps Policy Unchanged, Adjusts Forward Guidance; Amazon's Strong Earnings
Today's important market events:
[EUR] German Unemployment Change (Apr) - 09:55 CEST
[EUR] German GDP (QoQ - Q1) - 10:00 CEST
[EUR] German CPI (MoM - Apr) - 14:00 CEST
[USD] Core PCE Price Index (MoM - Mar) - 14:30 CEST
[CAD] GDP (MoM - Feb) - 14:30 CEST
The Asia Pacific (APAC) stock market showed a positive trend, drawing inspiration from the rally on Wall Street. In addition, the region absorbed a plethora of earnings, data, and the Bank of Japan's (BoJ) policy update. The BoJ, while keeping its policy settings unchanged, made minor adjustments to its forward guidance that remained dovish. Furthermore, the BoJ announced it would conduct a policy review.
Following Amazon's earnings report, the company's shares experienced an initial surge of approximately 9% in after-hours trading. However, this gain was short-lived as the shares eventually dropped by 2%. Some market analysts pointed out that the company's lower AWS growth forecast may have contributed to this decline.
The European equity futures market is indicating a stronger opening, with Euro Stoxx 50 future registering a 0.4% increase. This comes after the cash market closed with a 0.2% gain yesterday.
The DXY index is generally stronger against its peers. EUR/USD exchange rate continues to hold at 1.10 status, while JPY lags post-BoJ. Cable failed to maintain a 1.25 handle.
Initially, the ASX 200 index rallied higher with strong performance in financials and tech sectors. However, gains were eventually lost as the day progressed. Meanwhile, the Nikkei 225 index gained traction after Industrial Production and Retail Sales surpassed expectations. The Bank of Japan kept its policy settings unchanged and maintained a dovish stance while tweaking its forward guidance. The BoJ also announced a review of its broad monetary policy, which lent support to the market.
The Hang Seng and Shanghai Composite indexes were firmer due to strength in the tech sector and the release of several earnings reports. The People's Bank of China's liquidity efforts ahead of the 5-day mainland closure also contributed to the positive sentiment.
US equity futures were rangebound, with price action being hindered by Amazon shares faltering in after-hours trading. On the other hand, European equity futures indicate a stronger opening, with the Euro Stoxx 50 future up by 0.4% after the cash market closed 0.2% higher yesterday.
In the FX market, the DXY remained buoyant following the prior day's modest gains. A higher yield environment was supported by recent US data releases, including Q1 PCE prices, which were firmer, and a surprise fall in jobless claims. The EUR/USD exchange rate remained lacklustre, while the GBP/USD traded rangebound and attempted to reclaim the 1.2500 level. The USD/JPY rate gained momentum after the BoJ policy announcement, which maintained policy settings unchanged but tweaked forward guidance and announced a broad monetary policy review lasting one to one and a half years. The Antipodeans eventually softened in late trade, while the PBoC set the USD/CNY mid-point at 6.9240 vs an expected 6.9249 (prev. 6.9207).
In fixed income, the 10yr UST futures remained around prior day's lows after continued bear-flattening pressure from recent US data releases. However, some support was found after the BoJ kept policy settings unchanged. The Bund futures initially slipped below 134.00 but then pared losses after the BoJ announcement. The 10yr JGB futures were underpinned following the BoJ policy decision, which maintained policy settings unchanged and remained dovish despite the tweak to its forward guidance.
Crude futures gradually edged higher with tailwinds from the broader risk tone. Russia is reportedly considering various options to generate additional revenue from oil firms. Meanwhile, spot gold remained rangebound as the greenback made modest gains. Copper futures were underpinned by the mostly constructive risk environment.
In terms of upcoming events, investors will closely watch the release of EZ GDP Flash, German HICP Prelim., US PCE Price Index, and ECI. ECB's Lagarde is also scheduled to deliver a speech, and several companies, including Mercedes-Benz, NatWest, Colgate, Berkshire Hathaway, and Chevron, will announce their earnings.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team
Comments