JPY May Fall if PMI Data in Key Supply Chain Economies Brightens Outlook

THIS WEEK IN THE FOREX MARKETS

JPY May Fall if PMI Data in Key Supply Chain Economies Brightens Outlook

On Friday, Wall Street stocks ended on an upbeat note. The Dow Jones, S&P 500 and Nasdaq indices closed 0.44, 0.77, and 1.49 Percent higher, respectively. In the S&P 500 benchmark, the technology sub-component led the way, with index heavyweight Apple Inc (APPL) up over 10 percent by Friday’s close. This may help explain why the tech-leaning Nasdaq index was the session’s champion.

Its rise came as part of a broad rally in the technology sector and after an impressive earnings week for four out of the five members of the so-called FAANG group (Facebook, Apple, Amazon, Netflix and Google). Alphabet – Google’s parent company – was the loner who posted its first quarterly year-over-year revenue decline.Learn more about why technology stocks have rallied amid the coronavirus pandemic.

However, foreign exchange markets reflected a risk-off tilt. The haven-linked US Dollar trimmed some of its losses after reports that US lawmakers were no closer to ratifying another stimulus bill caused a flight to safety. The Euro was starved for love after Q2 GDP data printed record-breaking lows. AUD and NZD suffered with the commodity-linked Swedish Krona.

MONDAY’S ASIA-PACIFIC TRADING SESSION

In addition to thorny US-China relations, Asia-Pacific traders will be closely watching a cascade of PMI data from key regional supply chain economies. See the list here. If the statistics show on balance a polished outlook for growth despite a growing number of Covid-19 cases, the Japanese Yen’s anti-risk appeal may wilt while the allure of growth-oriented assets like the Australian and New Zealand Dollars may bloom.

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