Equity markets are off to a flying start after a raft of strong US corporate earnings reports boosted investor optimism, sending the world's leading indices well into positive territory. Everything from the Nasdaq Composite to Japan's Topix bounded higher and European bourses too and following suit.
Peter Garnry, Saxo's head of equity strategy, says that the Netflix share's 9% advance (on the back of a huge surge in its global subscriber base) was a key driver behind the overnight 1.8% gain in the Nasdaq 100. Among other releases, Goldman Sachs delivered a massive positive surprise with a 25% increase in EPS and a 15% surge in revenue, driven by a rebound in fixed income trading and debt underwriting.
In FX, the US dollar outlook remains cloudy, says John J Hardy, Saxo's head of forex strategy. As has been typical in recent days, the greenback is studiously avoiding any definitive directional move. Elsewhere, we see USDCHF through its 200-day moving average and EURCHF is nearing the key 1.200 level.
Finally, in the fixed income market, the yield on the 10-year Treasury is stable at 2.83%, despite the rally in equities, says Althea Spinozzi, of Saxo's fixed income trading desk. But the ever-flattening yield curve scenario persists and the spread between 2-year and 10-year maturities has hit a record low of 43.54 – its lowest point since 2017.
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.