Last week was full of market volatility with various factors influencing different currencies and stock markets. The Yen saw a strong rally against major currencies, with Swiss Franc and Dollar also performing well. On the other hand, Australian Dollar, New Zealand Dollar, and Canadian Dollar showed weakness, reflecting risk aversion sentiment.
In the US, NASDAQ and S&P 500 experienced significant declines, while DOW managed to post gains. In Europe, FTSE and DAX ended higher, but CAC hit new lows. In Asia, Japan’s Nikkei and China’s SSE faced downtrends.
Several factors are influencing the market environment, including sector rotation in stocks and US election risks. Global monetary policy easing continues, except in Japan, while China’s economic slowdown deepens. Amidst these factors, the de-inversion of the yield curve in the US is a noteworthy development with potential medium-term implications.
US stocks faced turbulence, with NASDAQ and S&P 500 falling, while DOW outperformed. Sector rotation was observed, and political uncertainty added to market volatility. Economic data suggested a possible need for future monetary policy easing.
The steepening of the yield curve is a critical development, historically signaling US recessions. Former New York Fed President William Dudley warned of a recession risk and called for immediate interest rate cuts.
Technical analysis showed NASDAQ facing downside risks, while DOW maintained a bullish outlook. The Dollar Index struggled to find direction, and Chinese investor sentiment deteriorated due to panic-driven rate cuts.
AUD/JPY and NZD/JPY saw significant losses due to a broad Yen rally and regional risk-off sentiment. EUR/CHF’s outlook suggested a potential decline with resistance levels to watch.
Overall, the market remains volatile with various factors influencing different currencies and stock markets. Investors should closely monitor developments to make informed decisions in this uncertain environment.