News and analysis

US stocks are inching higher after recent losses as chip stocks rebound following impressive earnings from TSMC and despite jobless claims coming in stronger than expected. TSMC is considered a bellwether for chip stocks, so the upbeat earnings have helped the sector, which had fallen in recent weeks. Attention is now turning to Netflix earnings after the closing bell.

USD/JPY is on intervention watch as the dollar index weakens for now, although the greenback remains fundamentally supported. For a sustained rise in the yen, the BOJ will need to address Japan’s still ultra-easy monetary policy as FX intervention can only provide temporary relief.

EUR/USD rises as the USD rally pauses. Oil steadies after a steep fall yesterday.

Chinese economic data is beating expectations at rates not seen since reopening to the world in 2023. And with the government and People’s Bank of China playing an active role in supporting mainland markets, it’s not surprising to see Chinese assets performing comparatively better than others across Asia right now.

The US dollar has risen around 6% from the late December low. And with bond prices approaching support which could send yields lower, the US dollar rally could at least find some headwinds - if not a retracement.

Australians are none the wiser as to what’s happening in the domestic labour market with another volatile jobs report creating more questions than answers. AUD/USD is largely unmoved, leaving offshore factors to remain in the driving seat.

USD/JPY upside looks limited in the near-term, hindered by narrowing interest rate differentials and perceived increased risk of Bank of Japan intervention. The stronger yen may add to growing downside momentum in the Nikkei 225, putting two of the strongest market trends in 2024 under threat.

The US dollar snapped a 6-day winning streak to allow AUD/USD to rebound from 64c in line with yesterday’s bias. And if AU employment figures perform today, it could extend its gains for a second day.

Middle East concerns should keep the downside limited for crude oil, after prices slid 3% as demand concerns intensified on weaker Chinese industrial data and amid the prospects of higher interest rates for longer. WTI technical analysis suggests the longer-term trend remains bullish, with the first short-term support level to watch coming in around $82 area.