Rally slows in quiet session, Yen intervention watch begins
|Stocks are catching their breath after recent strength, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.
Stocks drift in quiet session
With a long weekend ahead of them it was likely that some of the enthusiasm on Wall Street would ebb away, and European markets have followed suit after a very good start to the year for global equity markets. Monday’s wobble around Jerome Powell is long-forgotten, and while earnings season hasn’t delivered any major upside surprises so far, it has done enough to support stocks this week. The focus moves now towards tech stocks, still the major driver of earnings even if their lead has eroded of late.
Markets await yen intervention
It has been a year since USD/JPY was at this level, and investors are on watch for a move by the Japanese Ministry of Finance. The long weekend in the US might provide them with their opening, but caution may yet prevail, especially with a BoJ meeting at the end of the week. While no rate hike is expected, it is a prudent time to signal a faster pace of rate increases. Such co-ordinated action may prove more effective than a one-off ‘shock and awe’ intervention.
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