Daily Market Comment – Yen gets some relief as dismal PMIs fan recession fears



  • Gloomy business surveys from Europe and US add to market nerves
  • Yen and gold come out on top as Fed rate path is recalibrated lower
  • Stocks retreat after Snapchat warning, flurry of earnings coming up

Recession worries

There has been a tectonic shift in global markets this month, with concerns around an impending recession overshadowing inflation as the main threat to the outlook. This was reaffirmed by the latest business surveys from Europe and America, which were an absolute horror show, signaling that both economies are already in contraction as demand has started to lose power. 

The world economy is slowing down at a dramatic rate now that the fiscal and monetary stimulus is rolling off while the cost of living crisis bites consumers, sending traders scrambling to recalibrate the trajectory of the Federal funds rate lower. Bond markets are still confident the Fed will deliver a triple-barrelled rate increase this week but the terminal rate has been revised down to 3.40% and rate cuts are expected to begin early next year. 

The prospect of a downturn that cuts short the tightening cycle of central banks around the world came as music to the ears of the Japanese yen, which has been devastated by the Bank of Japan’s refusal to consider tighter policy. The loss of Japan’s trade surplus amid soaring energy prices has also been a huge factor, so the latest retreat in crude oil added fuel to the yen’s relief rally. 

FX market and gold

Aside from the yen, the reaction in the broader FX complex was not so straightforward. Most major pairs had a volatile session but closed almost unchanged. The euro went for a ride, losing ground initially after the dismal European PMI readings, although it managed to recover later on as the equally-grim US numbers knocked the wind out of the dollar. 

It’s a huge week ahead for the dollar, with a Fed rate decision on Wednesday and the latest GDP report on Thursday that will reveal whether America is in a technical recession already. There are mixed signals on this front as Wall Street economists expect a positive number while the Atlanta Fed GDPNow model points to a sharp decline, raising the stakes for traders. 

In the commodity sphere, gold bounced back. Bullion found fresh buy orders near the critical $1680 region last week and came back with a vengeance, as growth worries torpedoed bond yields and the dollar finally lost some steam. With markets transitioning to a paradigm where recession is public enemy number one and inflation loses its punch, gold might manage to stabilize, although any trend reversal will likely have to wait until the Fed hits the pause button. 

Snapchat spoils party in stocks

Alarming business surveys and a disastrous earnings report from Snapchat (-40%) sent shivers through the equity market on Friday, hitting ad-focused businesses like Google (-5.6%) and Meta (-7.6%) particularly hard. Even though Snap is much smaller and caters to an entirely different demographic, traders are cutting positions first and asking questions later, worried this might be the canary in the mine for the cyclical advertising sector. 

Overall, Wall Street has been caught between two minds lately. The ongoing growth scare has investors worried about imminent earnings downgrades, yet fading expectations for Fed rate hikes have provided a cushion for equity prices, and earnings have been better than feared so far.

The decisive vote will be cast by the tech juggernauts, most of which will announce their results this week, starting with Microsoft and Google tomorrow.

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.