Forex Today: US, Japanese Stocks Make New Records - 09 July 2024

Generally bullish global stock markets helped push the US indices the S&P 500 and the NASDAQ 100 to new record highs today, and the Japanese Nikkei 225 Index did the same with an unusually large price movement.

  1. Despite yesterday being a Monday, which is typically a relatively quiet day in the capital markets, we saw stock markets continue with their bullish moves to new record highs. The bullishness has followed right through today’s Asian session, with stocks trading near their highs approaching the Tokyo close. We are seeing new all-time high prices in the NASDAQ 100 Index and the broader S&P 500 Index rising strongly to new record highs on Friday. Most global equity indices are bullish, with Japan again the standout today as the Nikkei 225 index has risen very strongly to close at a new record not far from 42,000. The Japanese TOPIX has also risen very strongly today and is close to its all-time high. These are bullish signs for equities and trend traders will want to be involved here on the long side.
  2. Fed Chair Jerome Powell will testify about the Semi-Annual Monetary Policy Report before the Senate Banking Committee later today.
  3. In the Forex market, the Australian Dollar is the strongest major currency since the Tokyo open, while the Swiss Franc and the Japanese Yen are the weakest, putting the AUD/JPY currency cross in focus. The US Dollar lost quite heavily last week but is approaching a support level and remains within a valid long-term bullish trend. It is refusing to move substantially lower since markets opened this week.
  4. US consumers’ near-term inflation expectations declined for the second month running, which should help weaken the US Dollar and boost US stock markets as it gives ammunition to the case for a rate cut by the Federal Reserve. The CME FedWatch tool now indicates that 77% expect a rate cut of 0.25% at the Fed’s September meeting, up from only 63% a few days ago.

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