The US dollar’s resurgence last week saw it make it’s largest single week gain since late 2022. This occurred in spite of the drop in the probability of more rate hikes by the Fed this year, this however did not phase the ‘Big Tech’ led $NDAQ.
In spite of the strength on the greenback, the $NDAQ closed +0.51% higher on the week, led by the likes of $GOOG.
$GOOG was among the biggest gainers, up +11.02% on new developments in Bard, it’s AI technology. The share price of the world’s search leader is currently up 1.84% on the week.
The key daily closes from Tuesday’s close are as follows
$DXY +0.18%
$VIX +15.22%
$SPX -0.50%
$NDAQ +0.26%
$DOW -0.92%
The key weekly closes from last week Friday are as follows;
$DXY +1.40%
$VIX -3.63%
$SPX -0.36%
$NDAQ +0.51%
$DOW -1.24%
The carry trade and possible risk aversion
It was not exactly a risk off situation because we did not see the inflows into the Yen to support that narrative, although we did see bonds improve.
The yield differential of the two bond markets shows that there is a downtrend, although we are currently trading above it due to an AU10Y recovery that started in April.
The state of the momentum suggest a probability that price will sweep last week’s lows around 89.000. This would be inline with a carry trade with flows in favour of the Japanese Yen.
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