The international bags show a promotion this Monday, starting a week full of results from the big technology companies known as the “Magnificent Seven” on Wall Street. Meanwhile, the Japanese yen plummeted after an election that generated political instability in the country and oil suffered a significant drop due to the decrease in tensions in the Middle East.
The dollar, which is heading for a 3.6% monthly increase against an index of six major currencies, reached a three-month high against the yen, trading at 153.885 units. This came after the ruling Liberal Democratic Party (LDP) lost its parliamentary majority in Japan.
Crude oil prices fell by more than 5% after Israel carried out a retaliatory attack against Iran, focused on missile factories and other targets near Tehran, avoiding refineries or nuclear facilities.
US stock index futures pointed to a positive opening of the 0.5-0.7% on Wall Streetwhile the pan-European STOXX 600 index rises 0.4%, driven by strengthening airline stocks thanks to falling fuel prices.
Elections in the US and Japan
Just one week away from presidential elections in the US and awaiting a key labor report to be released on Friday, investors were cautious when taking positions in stocks or bonds.
“There will be numerous data releases this week that will test the market’s patience, including Friday’s US payrolls and earnings reports from five of the ‘Magnificent Seven.’ Additionally, the hotly contested US election campaign enters its final phase “said Jim Reid, strategist at Deutsche Bank.
The “Magnificent Seven” refer to the largest American companies in terms of market capitalization. The five that will present results this week are Alphabet, parent of Google, Microsoft, Meta (owner of Facebook), Apple and Amazon.
In Japan, the Nikkei index rose 1.8% after an initial drop after the LDP had its worst election result since 2009, having dominated Japanese politics for most of the post-war period. The yen depreciated about 1% against the dollar as investors anticipate a moderate shift in economic policy by the new government.
Currency markets were generally stable, with the dollar on track to post its biggest monthly gain in two and a half years, driven by signs of strength in the U.S. economy and the possibility of Donald Trump’s return to the presidency, which has elevated Treasury bond yields.
The yield on 10-year Treasury notes rose 4.8 basis points, reaching 4.8%, accumulating an improvement of nearly 45 basis points in the month, driven by both the increasing probability of a Trump victory and data suggest the U.S. economy remains resilient, which could lead to a slower rise in interest rates than many recently anticipated.
Gold, which hit record highs last week, was steady at $2,733 an ounce.
Source: Ambito
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