US stock markets pull back from record highs while the Japanese yen weakens further.
- The main US stock market index, the S&P 500, briefly traded at an all-time high yesterday before falling back to close the day slightly down, as tech stocks took a knock. A return to the recent highs will be a bullish sign in the index and a potential long trade signal. Global stock markets were mixed, with the Chinese stock market especially weak yesterday.
- In the Forex market, latent strength remains in the US dollar as short-term yields rise to reach long-term highs, but we also see strength in the euro and a weakness in the Japanese yen (due to rising risk appetite and yields). This puts a bullish USD/JPY at the center of today’s Forex market after rose yesterday on above-average volatility. If the USD/JPY short-term price action turns bullish by the first few hours of today’s New York session, a further rise over the coming days in USD/JPY is likely.
- Markets are awaiting the release later today of the minutes of the most recent FOMC meeting for clues about the Fed’s thinking on interest rate hikes in 2022. There will also be a release of the ADP forecast for this Friday’s US non-farm payroll data, with the creation of 405k new jobs expected as the consensus forecast.
- A new daily record was set in confirmed new coronavirus cases, with over 2 million cases recorded yesterday for the first time ever.
- Data suggests that the globally rampant omicron coronavirus variant, while considerably more infectious, has notably milder effects than previous coronavirus strains, with an estimated 70% reduction in the probability of hospitalization. This is potentially very good news for both health and economy, and this has helped to drive recent bullishness in stock markets.
- It is estimated that 58.5% of the world’s population has received at least one dose of a coronavirus vaccination.
- Total confirmed new coronavirus cases worldwide stand at over 295.6 million with an average case fatality rate of 1.85%.
- The rate of new coronavirus infections appears to now be increasing most quickly in Albania, Algeria, Argentina, Australia, Bahamas, Bahrain, Barbados, Belgium, Belize, Bolivia, Bosnia, Bulgaria, Canada, Colombia, Costa Rica, Croatia, Cyprus, Denmark, Dominican Republic, Ecuador, Estonia, Ethiopia, Finland, Fiji, France, Greece, Iceland, Israel, Italy, Jamaica, Kuwait, Lebanon, Luxembourg, Mali, Malta, Montenegro, Morocco, Netherlands, Panama, Peru, Portugal, Qatar, Saudi Arabia, Spain, Sweden, Switzerland, Turkey, the UAE, the UK, Uruguay, and the USA.