Bank dividends all the rage again

Chris Beauchamp IG

An upgrade for HSBC has put the bank’s shares at the top of the FTSE 100, which is helping the index to make solid gains.

Morgan Stanley gets keen on HSBC
Europe left out of the rally
US dollar keeps on falling

A 4% bounce for HSBC has put the FTSE 100 firmly ahead of its eurozone counterparts, helping it to play catch-up after yesterday’s Carney-inspired losses. The financial sector as a whole is putting in a sterling performance this morning, as US banks get moving on buybacks, but it is HSBC’s potential for increased cash return that has prompted Morgan Stanley to upgrade the stock. While bond yields are enjoying something of a resurgence of late, the ongoing fall in incomes from fixed income mean that dividends remain in high demand. The prospect of higher payouts from financial stocks could well provide yet another tailwind for the broader market rally, just as it began to look stagnant. Stock markets are looking healthier again, but the remarkable strength of the euro means that eurozone indices are left behind once again, continuing a pattern that has prevailed for most of the quarter.

A fresh 2017 low for the US dollar is doing wonders for commodity prices, and this is giving miners a lift too. The dollar’s troubles are more a reflection of the sudden shift in tone from the likes of Carney and Draghi, who, while not complete converts to the idea of tighter policy, have provided enough of a change to make the Fed’s actual policy tightening look positively pedestrian. With little US data on the calendar for the rest of the week, only opportunistic dip buyers look likely to be the salvation of the greenback.

Author

Chris Beauchamp

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.