Account
New to ADSS? Open an
account now to get started.
Already have an account?
Add funds to your ADSS account
Account
New to ADSS? Open an
account now to get started.
Add funds to your ADSS account
What’s happening: The Japanese yen fell against the US dollar on Monday, after the Bank of Japan’s interest rate decision.
What happened: The USD/JPY continued its uptrend, after news of the BoJ maintaining a dovish stance.
The forex pair climbed despite US dollar weakness versus other major currencies.
Why it matters: The Bank of Japan held a two-day monetary policy meeting from April 27 to 28. This was the first policy meeting of newly appointed Governor Kazuo Ueda. The Japanese central bank held its benchmark interest rate unchanged at -0.1%.
The Bank of Japan had taken its benchmark interest rate below 0% in 2016 and has maintained it at -0.1% since then.
Currency trading remained light on Monday due to the Labour Day holiday in most parts of Asia, including Singapore, Hong Kong, mainland China and India.
Traders awaited the Federal Reserve’s monetary policy meeting, scheduled for May 2 and 3. The US central bank is widely expected to raise its key interest rates by 25 basis points.
Traders also expect the Fed to pause interest rate hikes after May, given the rising concerns around the US economy. The US reported GDP growth of an annualised 1.1% for the first quarter of 2023, which marked a deceleration from the 2.6% expansion in the previous quarter. The latest figure also missed market expectations of 2% growth.
The US dollar index, which measures the greenback’s performance versus a basket of major currencies, fell 0.12% to 102.03 on Monday, amid renewed banking crisis concerns.
The USD/JPY forex pair extended gains and rose above 137.00 on Monday. The Japanese yen hitting a two-month low sent the Nikkei 225 higher on Monday. The Japanese stock index breached the key resistance level of 29,000 and rose to a more than eight-month high of 29,179.67.
What to watch: Investors will monitor updates from the Fed’s policymakers to get insights into whether the central bank may keep interest rates unchanged till the end of the year.
Context: All three main US indices ended in the red on renewed banking crisis concerns.
Details: US stocks inched lower on Monday, with investors digesting news of JPMorgan Chase’s purchase of most of First Republic Bank’s assets.
Regulators taking over First Republic Bank marked the third major bank failure in the US in less than two months. JPMorgan Chase said in a press release on Monday that it was taking over First Republic’s deposits and a “substantial amount of their assets and certain liabilities.”
CEO Jamie Dimon further said in a statement that the acquisition would be accretive to its shareholders and help advance the company’s wealth strategy.
Trading in First Republic Bank’s stock was halted on Monday morning. Regional bank shares slid after the news. JPMorgan Chase’s stock rose 2.14% to settle at $141.20 on Monday.
The Dow Jones index fell 0.14% to 34,051.70, while the S&P 500 lost 0.04% to close at 4,167.87 and Nasdaq 100 declined 0.11% to settle at 12,212.60 on Monday.
What to watch: Traders await the Federal Reserve to begin its two-day monetary policy meeting on Tuesday, to gain further insight into whether the latest banking turmoil has altered the central bank’s rate plans.
Investors also look forward to earnings reports from major companies, including Advanced Micro Devices, Ford, and Starbucks later this week.
Other Markets: Most European market remained closed on Monday. The STOXX Europe 600 ended higher by 0.05%.
China put out a contract for test-firing the long-range 203-millimeter artillery cannons, after the Russia-Ukraine war entered its fifteenth month. Despite this, the safe-haven US dollar index remained under pressure this morning.
Australia’s job advertisements fell by 0.2% in April, after a 2.7% decline in the previous month. Although this marked the third consecutive month of decline in job ads, the AUD/USD forex pair remained elevated.
Japan’s consumer confidence index improved to 35.4 in April, from 33.9 in the previous month. Despite the figure being the highest reading since January 2022, the JPY/USD pair declined in forex trading this morning.
Canada’s S&P Global Manufacturing PMI rose to 50.2 in March, from 48.6 in the previous month. The expansion in Canada’s manufacturing sector lend support to the CAD/USD forex pair.
India’s S&P Global Manufacturing PMI hit a four-month high of 57.2 in April, improving from 56.4 in the previous month. The figure also came in higher than market expectations of 55.8, and sent the INR/USD pair slightly higher in forex trading this morning.
Indonesia’s inflation rate, Australia’s interest rate decision, Netherlands’ inflation rate, Germany’s retail sales and HCOB Manufacturing PMI, Russia’s S&P Global Manufacturing PMI, UK’s nationwide housing prices and S&P Global/CIPS Manufacturing PMI, Switzerland’s consumer confidence and Manufacturing PMI, Spain’s S&P Global Manufacturing PMI, Italy’s S&P Global Manufacturing PMI and inflation rate, France’s HCOB Manufacturing PMI, Eurozone’s HCOB Manufacturing PMI and inflation rate, Hong Kong’s GDP growth rate, Mexico’s business confidence, as well as US JOLTs Job Openings and factory orders.
ADSS
8th floor, CI Tower
Corniche Road
PO Box 93894
Abu Dhabi
United Arab Emirates
Trading Services
ts@adss.com
+971 2 657 2414
Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.
ADS Securities L.L.C – S.P.C (“ADSS”), a limited liability company – sole proprietorship company incorporated under United Arab Emirates law. Registered under Commercial License No.1190047. ADS Securities L.L.C S.P.C is regulated and authorised in the UAE by the Capital Market Authority (CMA) under Category 1 License No.305027 (Trading Broker, Trading and Clearing Broker, Trading Broker in the International Markets, Trading Broker of OTC Derivatives and Currencies in the Spot Market, Financial Products Dealer) and Category 5 License No.20200000217 (Introduction). Registered Office: 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.
The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.
ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.
