Global stock markets are notably lower as the European session gets underway, jolted by bad earnings announced by Palantir.
- Stock markets are suffering today, as almost all indices have turned bearish, led lower by the Korean KOSPI Composite which is down by more than 2.25% on the day. The US NASDAQ 100 and S&P 500 Indices are also firmly lower. The trigger for the selloff was poor earnings reported yesterday by the big tech firm Palantir, but the background uneasiness over stretched overvaluations, especially in the USA, was the fertile ground for the fear to take root. It is still a bull market, but we may now see a relatively deep correction at least. Trend traders will be sitting tight in the meantime on their long positions in stock indices.
- The Reserve Bank of Australia kept its Official Cash Rate on hold at 3.60%, which is a surprise to nobody after the hot inflation print last week of 3.5%. RBA Governor Bullock said there may be no further cuts made in the current cycle. The Australian Dollar is lower, but it is not clear that the RBA has had much of an influence on that.
- The Japanese Yen has gained firmly on the stock market selloff, as the Yen tends to be the safe haven currency of choice these days. The Japanese financial establishment does not want the Yen to gain, so the Japanese Prime Minister Takaichi reacted with an attempt to stop the appreciation by saying that Japan is still only halfway to reaching a sustained achievement of price targets, basically confirming a dovish monetary policy will continue for some time. The Yen is in a long-term bearish trend.
- The US Dollar is retreating from the new 3-month high price which it made yesterday. There will be trend followers looking to buy the greenback on dips.
- In the Forex market, the Japanese Yen has been the strongest major currency since today's Tokyo open, while the New Zealand Dollar has been the weakest. The USD/JPY currency pair remains in focus after triggering a long trade entry at most trend-following funds three weeks ago but is looking less bullish as it falls from ¥154.00 to near to ¥153.00. Trend traders will still want to be long here, and momentum traders will be looking for a bullish breakout.
- Yesterday's release of Swiss CPI data showed stronger than expected deflation, at -0.3% month-on-month while a decline of only -0.1% was expected. This has helped make the Swiss Franc one of the strongest major currencies today, second only to the Japanese Yen. Day traders might want to look for long CHF trades today.
- Yesterday's release of US ISM Manufacturing data came in a little worse than expected but won't have much impact on the market..
- Attention is shifting towards the US Supreme Court, which is expected to begin ruling this Wednesday on the legality of President Trump's tariffs which have been imposed this year. Interpretations of the US constitution differ on whether the President has the power to decree such tariffs. If the Supreme Court finds the tariffs were unlawful, which is unlikely, we can expect a lot of volatility in capital markets.
- Soybean futures have made a new bullish breakout to a 4-month high price, which is attracting some trend followers to trade it long. Soybeans got a boost last week when China agreed to resume purchases of US soybeans. If Soybean futures are too big and expensive for you, you could consider the more accessible and affordable ETF SOYB if you want exposure.
- Bitcoin is close to making a new 4-month low price. The dominant risk-off sentiment will tend to depress the price of Bitcoin.
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