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The swings in USD/JPY persists.

While there was no evidence of intervention earlier there is concern amongst traders that it could hit. Increased nerves is seeing these hot potato swings. I posted earlier on the options expires due around 155.50/60 and this seems to have provided some support:

• Some USD/JPY option expiries to be aware of for 10am NY time today

Update:

This article was written by Eamonn Sheridan at www.forexlive.com.

Another strong employment report from Australia.

Jobs added is more than double the central estimate, most of them full time (over 40K in June and May).

A little gloss taken off by the rise in the unemployment rate. Its rising from near 50 year lows, and the participation rate is up, so on the whole not too bad at all (except if you’re unemployed, of course).

This article was written by Eamonn Sheridan at www.forexlive.com.

Rising exports and rising imports but not by as much as was expected, and not as much as in May.

Exports to:

• China +7.2% y/y
• the EU -13.4% y/y
• the US +11% y/y

USD/JPY has been heavy on the session:

• USD/JPY under 155.50 now

Its around 155.60 as I update

This article was written by Eamonn Sheridan at www.forexlive.com.

There is some speculation of Bank of Japan intervention. I haven’t seen or heard anything of this and it would seem to be not the way the BOJ is operating right now.

• The BoJ recently slammed yen crosses after US data, at a time when USD/JPY was already falling
• the BoJ tends not to intervene in times of deep and thick liquidity, like now with Tokyo markets fully operating

But, I could be wrong!

Anyway, Yen higher:

This article was written by Eamonn Sheridan at www.forexlive.com.

Aussie dollar traders are preparing for more movement in the currency today with the latest employment numbers due to drop early in the Asian trading session. The Australian job market has remained tight so far this year and is one of the contributory factors in the RBA keeping rates elevated and pushing the prospect of a potential rate hike, while most of the rest of the developed world are looking at easing.

Market expectation is for a 20k increase in jobs over the last month with the unemployment rate creeping up 0.1% to 4.1%. Any strong deviation from these figures should see some significant moves in the currency. The AUD/USD is sitting back in the middle of recent ranges, having had a good run north on the back of a weaker greenback over the last few weeks. Strong resistance on the hourly charts now sits around recent highs just south of 68 cents, with trendline support now around 0.6690. A higher print will see that resistance level challenged and strengthen calls for a rate hike from some quarters, while a weaker print could have a greater impact and push the pair lower through that trendline support.

The post Trade the Aussie Dollar on the Australian Employment Data Today first appeared on IC Markets | Official Blog.

Seem weird:

ah, here we go, it’s a thread!

I am not sure this will go off as well as Biden expects 😉

This article was written by Eamonn Sheridan at www.forexlive.com.

During Schumer’s one-on-one meeting with Biden on Saturday, “Schumer forcefully made the case that it would be better for Biden, better for the Democratic party, and better for the country if he were to bow out.”

How much longer does this charade go on? Biden is under pressure from all over to step aside. The clock is ticking.

—

Schumer is the senior United States senator from New York & Senate Majority Leader

This article was written by Eamonn Sheridan at www.forexlive.com.

Its just on to 8.15am in Tokyo.

USD/JPY is making new recent lows after its fall overnight:

Forexlive Americas FX news wrap: Nasdaq suffers worst drop since 2022. USD/JPY pressured

There is no fresh new catalyst

This article was written by Eamonn Sheridan at www.forexlive.com.

This is one of the most-unusual periods in markets I can remember. It’s hard to pin down what’s going on but consider this:

The Russell 2000 is up 12% in five days. According to John Authers, in the last 30 years that move has only been exceeded by snap-back rallies following major crises: LTCM, Dot Coms, GFC, 2011 US debt downgrade and the pandemic. For a pure rotation, it’s unprecedented.

Bespoke notes that the Russell 2000 yesterday closed 4.4 standard deviations above its 50-day moving average. No other US index has ever closed at that much of an extreme.

When you layer in that the Nasdaq is flat over the same period and the S&P 500 only moderately higher, it’s even more strange. The 5-day gain relative to the S&P 500 is the largest ever.

Some thoughts:

1) There is a rate-cut narrative at work. The softer CPI may have confirmed to the holdouts that rate cuts are coming. Still, it can’t be explained by macro as yesterday’s strong retail sales report didn’t prevent a 3.5% rally.

2) Politics is another explanation and the hope that Republican sweep will lead to corporate tax cuts and less regulation. I get the sentiment but the House is still very much up for grabs and it’s tough to justify this kind of move on politics alone.

3) Call buying. It’s been heavy. There is so much of the tail wagging the dog in many stocks right now and call buyers rotating out of tech to less-liquid stocks.

4) Chip makers are struggling. Nvidia has stalled out after an insane rally. Investors could be looking to redeploy or diversify following the end of Q2. Trump also talked about Taiwan paying for defense yesterday and Biden threatened more sanctions because chips continue to find their way to China.

5) Fund flows. There may be a pure rotation trade but there could also be a combination of a squeeze and funds blowing up on highly levered trades.

6) Broadening. The breadth of the rally has been remarkably narrow, limited to a few megacap tech and chip names. Aside from how aggressive they are, the moves are an endorsement of a healthy move and a soft landing scenario with a Fed put.

I’m sure there are other explanations but that’s the state of things. Whatever it is, the move has market worried to day with S&P 500 futures down 1% and Nasdaq futures down 1.5%. It’s not just tech either as the Russell 2000 is down 1% per-market follwing yesterday’s 3.5% gain.

This article was written by Adam Button at www.forexlive.com.

Biden was scheduled to speak in Las Vegas.

CEO of Unidosus says the Prez has Covid.

This article was written by Eamonn Sheridan at www.forexlive.com.

Via a note from JPM on oil ICYMI:

• estimate the equilibrium price of WTI oil at around $70/bbl
• even at $60/bbl, WTI prices are too low to incentivize
  production, potentially leading to a spike to $100/bbl in following
  year

This article was written by Eamonn Sheridan at www.forexlive.com.

A note from Goldman Sachs, info via Reuters, citing GS ‘without providing figures’:

• value of stocks hedge funds ditched over the last five trading sessions was the biggest since November 2022 and is close to a five-year record
• de-risking has been led by the information technology sector, followed by industrial, healthcare, consumer discretionary and communications services

ICYMI:

• Forexlive Americas FX news wrap: Nasdaq suffers worst drop since 2022. USD/JPY pressured

—

Goldman Sachs is a good source of such info as its one of the biggest global providers of equities trading and financing for hedge funds

This article was written by Eamonn Sheridan at www.forexlive.com.