Markets:
- CHF leads, NZD lags
- WTI crude oil up $1.34 to $75.63
- S&P 500 down 34 points to 3817
- Gold down $5 to $1787
- US 10-year yields up 11 bps to 3.59%
There’s a visible shift in markets as we stumble towards year end. Economic data and events are less of a factor and flows dominate. There was a large bid for the US dollar
US Dollar
The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purely fiat currency, i.e. not backed by a physical commodity. The former gold standard aligned to the US dollar, made both gold and silver the legal-tender coinage of the USA, with the guarantee that 1 USD could be converted to one and a half grams of pure 24 carat gold. However, the gold link was eventually abolished by President Richard Nixon in 1971. Since the gold standard was cut, the US dollar has become the world’s number one reserve currency.This means foreign nations possess large amounts of their cash reserves in USD, accounting for approximately 65% of the world’s foreign exchange reserves.How to Trade the US Dollar?The US Dollar is traded in a variety of ways, most notably on the foreign exchange (forex) market versus other currencies; traded as pairs. Any retail broker offers exposure to the USD in many exchange pairs, given its popularity and liquidity. The USD is involved in the majority of the most traded forex pairs, such as the EUR/USD, the USD/JPY, the GBP/USD and the USD/CHF, known as the “four majors”, and the “commodity pairs”, i.e. AUD/USD, USD/CAD and the NZD/USD.
The US dollar, (symbol $, code USD) is the fiat currency of the United States of America (USD) and the most widely traded currency globally. It was introduced into the US in the late 18th Century, with paper notes not being distributed until the following century. The US dollar, also informally known as the greenback, is the world’s most foremost reserve currency, due in large part to the importance of the US economy on the world stage. Once backed by gold (in the 1900’s), the USD is now a purely fiat currency, i.e. not backed by a physical commodity. The former gold standard aligned to the US dollar, made both gold and silver the legal-tender coinage of the USA, with the guarantee that 1 USD could be converted to one and a half grams of pure 24 carat gold. However, the gold link was eventually abolished by President Richard Nixon in 1971. Since the gold standard was cut, the US dollar has become the world’s number one reserve currency.This means foreign nations possess large amounts of their cash reserves in USD, accounting for approximately 65% of the world’s foreign exchange reserves.How to Trade the US Dollar?The US Dollar is traded in a variety of ways, most notably on the foreign exchange (forex) market versus other currencies; traded as pairs. Any retail broker offers exposure to the USD in many exchange pairs, given its popularity and liquidity. The USD is involved in the majority of the most traded forex pairs, such as the EUR/USD, the USD/JPY, the GBP/USD and the USD/CHF, known as the “four majors”, and the “commodity pairs”, i.e. AUD/USD, USD/CAD and the NZD/USD.
Read this Term into the London fix and it entirely reversed in the following hour. That was the main trading point of the day and underscores what’s to come.
Another driver was the stock market
Stock Market
A stock or equity market is defined as the aggregation of buyers and sellers of stocks, which reflect ownership claims on businesses.These may also include securities listed on a public stock exchange, as well as stock that is only traded privately. Common examples of this include shares of private companies that are sold to investors through equity crowdfunding platforms.Unlike the past, the stock market has grown to include a more mature retail market, though nearly all investment is still done through brokers and electronic trading platforms. What Makes Up the Global Stock Market?The stock market itself consists of a global network of stock exchanges, which most developed countries have access to. Presently there are over 60 such exchanges with a total market capitalization of over $70 trillion.The largest stock markets are the United States, Japan, and Great Britain, with numerous other exchanges worldwide following behind. Retail investors rely on the stock market for all their equity or share trading needs. This function has been assumed by online stock brokers, which have largely replaced the need for dealing with popularized trading floors for retail trading needs.A stock broker is an agent or intermediary between investors and the stock market. Stock brokers play an important role in online trading and have grown in scale and coverage in recent years.Stock brokers historically have charged for transactions and other services though crucially have shifted to commission-less transactions over the past few years after being disrupted by fintechs and other companies.
A stock or equity market is defined as the aggregation of buyers and sellers of stocks, which reflect ownership claims on businesses.These may also include securities listed on a public stock exchange, as well as stock that is only traded privately. Common examples of this include shares of private companies that are sold to investors through equity crowdfunding platforms.Unlike the past, the stock market has grown to include a more mature retail market, though nearly all investment is still done through brokers and electronic trading platforms. What Makes Up the Global Stock Market?The stock market itself consists of a global network of stock exchanges, which most developed countries have access to. Presently there are over 60 such exchanges with a total market capitalization of over $70 trillion.The largest stock markets are the United States, Japan, and Great Britain, with numerous other exchanges worldwide following behind. Retail investors rely on the stock market for all their equity or share trading needs. This function has been assumed by online stock brokers, which have largely replaced the need for dealing with popularized trading floors for retail trading needs.A stock broker is an agent or intermediary between investors and the stock market. Stock brokers play an important role in online trading and have grown in scale and coverage in recent years.Stock brokers historically have charged for transactions and other services though crucially have shifted to commission-less transactions over the past few years after being disrupted by fintechs and other companies.
Read this Term. Coming into the trading day, futures were flat but tech began to stumble early and continued to struggle, with the Nasdaq down 1.4% on the day. A number of megacap stocks are at or approaching new lows in a big concern for the market. I strongly suspect that tax loss selling is now at work and coming later than usual. My belief is that many market participants were waiting for Powell to throw a lifeline and instead he tossed a hand grenade.
The selling in equities was tolerated sell by the FX market but the rise in yields was noticeable in the bid in USD/JPY. Some of that was also the reversal of an earlier drop on talk of a BOJ mandate review. The market has evidently concluded that’s not coming but yen risks remain high.
The loonie benefited from a boost in oil prices as the market tries to see through the initial pain of China’s reopening and digests Friday’s announced SPR purchases. There’s a growing sense than $70 is the bottom for oil prices, though that could certainly be tested in a tough recession.
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