"The trade war headlines have come full circle," reports Saxo Bank Head of FX Strategy John Hardy. In this case, of course, 'full circle' means a return to President Trump's initial aggressive stance with the administration prepared to more than double the planned tariffs on $200 billion in Chinese imports in an attempt to get Beijing to the negotiation table.
In the forex space, Hardy notes the dollar's continued strength despite a slight June PCI inflation miss with the JPY as the largest mover in the wake of Monday's Bank of Japan meeting.
"The BoJ's ultra-loose policies are set to continue," says Saxo fixed income specialist Althea Spinozzi, who adds that governor Kuroda 'blinked' in the face of market pressure and let the 10-year Japanese government bond yield fluctuate 20 basis points around zero.
"The JPY weakness followed the initial plunge in JGB yields," says Hardy, who adds that the yield move – but not that of the currency – has since retraced.
In stocks, Apple shares gained 4% after hours following a strong earnings release while in the commodities space, Saxo Head of Commodity Strategy Ole Hansen says that trade war fears appear to be offsetting supply risks in crude oil while gold remains significantly correlated to CNY with key support at $1,210/oz.
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.