Currency and Bond Market Overview
The US Dollar is trading marginally higher today, stabilizing after two days of declines. Treasury yields have also ticked up to start the North American session, with the 10-year yield rising 3.7 basis points, retracing a similar fall from last week.
The Japanese Yen and Central Bank Watch
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USD/JPY: The biggest mover among majors, gaining 0.26% to 156.00.
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Bank of Japan (BoJ) Outlook: The BoJ is signaling that its rate-hiking cycle will likely extend beyond 0.75%. However, policymakers are avoiding a fixed path or a precise “neutral rate,” preferring a flexible, data-dependent approach.
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Upcoming Rate Decisions: Next week will be pivotal for central banks, with interest rate decisions due from the Bank of Japan, the ECB, and the Bank of England.
Technical Analysis Video:
In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving the three major currency pairs—EURUSD, USDJPY, and GBPUSD. I outline the bias, risks, and map out the next targets that matter most for traders.
US Equity Markets: Sector Rotation and Tech Weakness
US stock futures are mixed as the week comes to a close, following the Federal Reserve’s third rate cut of the year on Wednesday. The rate cut is encouraging a broader market rotation, with small-cap stocks outperforming and global markets generally trending higher.
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Dow Futures: Slightly higher (+86 points).
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S&P 500 & Nasdaq: Marginally lower, with the Nasdaq underperforming due to pressure on high-valuation technology stocks.
Key Tech Concerns:
Weakness in AI-related names is weighing on the Nasdaq. Investors are growing concerned that rising AI infrastructure costs may hurt margins, despite the long-term growth narrative.
Corporate Movers: AI & Earnings Focus
Broadcom (AVGO)
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Price Action: Down ~5.8% in pre-market trading to $382.75 (despite hitting a record high of $414.61 earlier this week).
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Earnings: Beat expectations with $18.02B revenue (vs. $17.5B expected) and raised its dividend by 10%.
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The Narrative: Management highlighted surging AI demand and an expanded $73B AI backlog. However, investors are locking in profits after a ~75% YTD rally, citing concerns over valuation and slower non-AI revenue growth.
Oracle (ORCL)
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Price Action: Trading roughly -0.8% lower today, following a sharp -10.83% drop yesterday.
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The Narrative: While cloud and AI metrics were strong, overall revenue and guidance disappointed
FX technical outlook: EURUSD, USDJPY, GBPUSD set the tone into the North American session
