I wrote the other day wondering about a shift to ‘risk-on’ and this sentiment shift seems to be getting underway. Stocks, Commodities and the Commodity currencies are all enjoying some classic style ‘risk-on‘ at the moment. I’m keeping an eye on the US$ to see if this might last.
The US$ is a bit weaker but the S&P500, Oil, the A/U, E/U and Kiwi are all bit higher in what appears to be general slow-motion activity whilst the S&P500 carves out new 2016 highs. There is CNY Trade Balance data out today that might shake things up though so keep an eye on this during the Asian session.
Janet Yellen’s soothing words about the jobs market helped to lift US stocks but did little for the US$. The US$ index looks likely to close the day with a bearish candle and is trying to avoid falling below the support of the weekly Ichimoku Cloud and this bearish bias must be perplexing for US$ Bulls. With the US$ lower but the U/J, stocks, Oil Gold and A/U higher, it looks like a bit of classic style ‘risk-on’ could be trying to emerge. Of particular interest, to me at least, was that the USD/JPY traded higher on the day, perhaps preferring to run with stocks than the US$?
Last week: Friday’s NFP result was much weaker than expected and this news sent the US$ tumbling from the key resistance level it had recently stalled at. This US$ shift triggered movement with a number of currency pairs and commodities and I have posted charts of some of these in this update for consideration. The big question now is, as I see it at least, has this NFP result been enough of a miss to undermine the recent US$ rally?