Author: Daniel Chang

U.S. stock index futures remained stable in Wednesday evening trading following a record-breaking surge on Wall Street. The rally was sparked by Donald Trump’s 2024 presidential election victory, with investors now turning their attention to the Federal Reserve’s anticipated decision on interest rates. The Federal Reserve is expected to announce a rate cut on Thursday, though its guidance on future rate moves remains uncertain, adding some tension for market watchers. Wall Street hit new highs on Wednesday, as investors welcomed the possibility of lower corporate taxes and potential Republican led policy changes following Trump’s win. The prospect of a Republican…

Japan allocated 3.168 trillion yen (about $20.7 billion) for currency intervention on July 11, followed by an additional 2.367 trillion yen on July 12, as detailed in quarterly data from the Ministry of Finance (MOF) released on Friday. This breakdown is part of the larger 5.53 trillion yen intervention conducted from June 27 to July 29, aimed at stabilizing the yen during a period of heightened volatility. In those two July days, the yen’s value surged, reaching 157.30 to the dollar after dipping to a low of 161.76. (Exchange rate: $1 = 153.13 yen)

The Federal Reserve reduced interest rates by 25 basis points on Thursday, reflecting progress in controlling inflation and a cooling labor market. This move by the Federal Open Market Committee (FOMC) sets the benchmark rate in a range of 4.50% to 4.75%. This rate adjustment represents a shift from the larger, 50 basis point cut that initiated the easing cycle in September. According to RBC, a smaller cut was necessary due to resilient economic conditions and persistent inflation, which prevented another larger rate reduction. The rate cut, the second this year, came after a weaker than expected jobs report for…

Following the recent U.S. presidential election, Alpine Macro (BCBA) has highlighted three emerging market (EM) currency trades that could gain traction, particularly if heightened protectionist policies take hold under the current administration. The suggested pairs include shorting the Mexican peso (MXN) against the Brazilian real (BRL), the Chinese yuan (CNY) against the Japanese yen (JPY), and the Thai baht (THB) against the Singapore dollar (SGD). 1. Short Mexican Peso (MXN) vs. Brazilian Real (BRL) Alpine Macro points to Mexico’s potential vulnerability to a more protectionist U.S. approach, given its expanding trade surplus with the U.S. With Mexico recently becoming the…

Merger and acquisition (M&A) activity in 2024 has seen a remarkable rebound, breaking the stagnation experienced in 2022 and 2023. This renewed momentum highlights a period of dynamic deal making and expansion. According to analysts from Wells Fargo (NYSE), both the volume and total value of M&A transactions have risen significantly this year, spurred by economic conditions that encourage mergers and acquisitions. Through the first nine months of 2024, Wells Fargo estimates a rise of over 25% in deal values and a more than 10% increase in the number of deals compared to the same timeframe in 2023. Several factors…

The euro fell to a near seven month low against the U.S. dollar on Monday as investor concerns grew over potential trade tariffs from the incoming U.S. administration, which could negatively impact the eurozone economy. Since last week’s U.S. presidential election victory by Donald Trump, the euro has gradually weakened, with fears intensifying around possible tariffs his administration may impose. Reports last Friday indicated that Trump may bring back Robert Lighthizer, a well-known advocate for strict trade policies, to oversee trade regulations. However, sources familiar with the situation stated that Trump has not yet officially appointed Lighthizer to this role.…

Asian currencies traded within a narrow range on Monday, as investors reacted coolly to China’s latest fiscal spending efforts. Meanwhile, the U.S. dollar held steady, with traders eyeing key consumer inflation data expected later this week. Asian currencies have faced significant losses in recent sessions as the dollar strengthened following Donald Trump’s victory in the 2024 U.S. presidential election. Although the Federal Reserve’s recent interest rate cut briefly slowed the dollar’s rise, the greenback retained much of its recent gains. The Japanese yen and Chinese yuan experienced some of the steepest declines, while most Asian currencies continued to struggle. Both…

New York/London – The U.S. dollar climbed to its highest point in over six months against major currencies on Tuesday, while Bitcoin eased slightly after hitting a record level amid rising expectations of inflationary tariffs from President elect Donald Trump. Bitcoin increased by 1.88% to $89,683.00, just under a new peak of $89,982, with Trump expressing ambitions to make the U.S. the global leader in cryptocurrency. Analysts suggest that potential new tariffs could drive up prices, making it harder for the Federal Reserve to justify interest rate cuts. U.S. 10-year Treasury yields rose by 13.1 basis points to 4.439%. Vassili Serebriakov,…

Gold prices dropped in European trading on Tuesday as the U.S. dollar strengthened sharply, driven by speculation on economic policies from the incoming Donald Trump administration. Following Trump’s election win last week, an improved risk appetite reduced demand for gold as a safe haven, while the dollar’s rally added pressure on gold prices. Spot gold fell 0.9% to $2,595.56 an ounce, and December gold futures slid 0.6% to $2,601.55 an ounce as of 06:52 ET (11:52 GMT). Over the past two weeks, gold prices have pulled back from nearly $2,800 an ounce, a previous record high, with sentiment dampened by…

According to a report from Bank of America (BofA), the S&P 500 appears overvalued based on 19 out of 20 valuation metrics, signaling limited long term growth potential for the index. BofA’s analysis, using Price to Normalized Earnings as a predictive metric for 10-year returns, forecasts an annual price increase of just 1-2% over the next decade. In contrast, the equal weighted S&P 500 index where each stock has equal influence projects a slightly stronger return of around 4-5%, suggesting better prospects for smaller stocks compared to the largest firms. “This valuation trend isn’t new,” noted BofA strategists, led by…