It was a relatively quiet session yesterday. But that didn’t stop US stock markets posting yet more record closes. Wall Street’s benchmark S&P500 and the tech-laden Nasdaq extended their run of all-time closing highs to eight straight sessions. The blue-chip Dow Jones notched its second consecutive record closing high.
Tesla fell after CEO Elon Musk’s Twitter poll on whether he should sell 10% of his stock in the electric automaker. The poll garnered over 3.5 million votes, with 58% voting “yes”. The 4.9% decline in the share price weighed on the S&P500 index.
Fed speak may offer some direction
Relatively dovish central bank messages and strong US labour market data on Friday added to optimism generated by healthy earnings on both sides of the Atlantic. The Fed is trying not to spook markets, while trying to shift to a more credible rate guidance position.
We had various Fed speakers out yesterday give hints about the monetary policy outlook. But they failed to move the market in any major way. We do have the Fed Chair Powell and the ECB’s Lagarde and Lane on the wires later today which may spice things up a little bit more, especially as the risk calendar is fairly quiet.
USD/JPY breads down through support
The US 10-year real yield fell to the lowest since August and is closing in on the bottom at -1.20%. This weakness showed up in USD/JPY with the major dropping below the lower bound of the sideways trading channel in place since mid-October at 113.23.
The resistance zone above 114 has capped prices, at least for now. The first major level of support sits at 112.07 which is the September high. Ahead of this lurks a Fibonacci retracement level of the September to October move at 112.57.
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