Asia open: Needle in a haystack

Stephen Innes SPI Asset Management

The last trading day before a long holiday weekend can often be volatile, especially considering the combination of month-end activities and important economic releases like the PCE report on Good Friday. Take the S&P 500, for instance; few expected a rally into the weekend; however, to many traders' surprise, the index notched another record high on Wednesday. This rally caps off a strong quarter, with the market surging by 10%. Even underperforming Mag 7 stocks like Apple and Tesla saw gains. However, the artificial intelligence market darling Nvidia experienced a decline due to profit-taking. Still, this resilience of the S&P 500 suggests that market sentiment remains robust despite potential inflation headwinds.

Identifying a specific market driver amid the current conditions, particularly with a long Easter weekend approaching, alongside month-end dynamics and significant upcoming data releases, can indeed be akin to finding a needle in a haystack. The multitude of factors at play can make it challenging to isolate one particular catalyst that is driving market movements.

One clear positive that did catch our eye was the solid performance of the US 7-year Treasury note auction. With a yield almost through the when-issued (WI) yield, coupled with strong participation from indirect bidders in the 70% range, it indicates continued interest in yields at current levels. The low dealer participation and overall successful auction suggest confidence in the market's appetite for longer-term US Treasuries. This positive outcome follows yesterday's successful 5-year auction, reflecting sustained demand for US government debt.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.