Equity Markets

US equity markets logged a third straight day of losses as inflation concerns remained at the centre of investors’ focus. Stocks did finish well off the lows though with a tech rebound in stocks such as Facebook (FB) bringing the NASDAQ to within a whisker of the breakeven line.

• Dow Jones down 164 (-0.48%)
• NASDAQ down 4 (-0.03%)
• S&P 500 down 12 (-0.29%)
• Russell 2000 down 17 (-0.78%)

Losses this week have been driven by investor concerns that the post-COVID recovery might stir up lasting inflation and prompt a roll-back of the Fed’s easy monetary policies.

Overnight the minutes from the last FOMC meeting were released. They showed debate emerging between members of the Fed over whether rising inflation will be more than “transitory”. This highlighted the possibility of the Fed bringing forward guidance as to when they plan to taper theirs near $120 billion a month asset purchases.

Economic Announcements – FX

Australian Employment figures will be released at 11:39 AEST today. From recent big beats, a more modest figure of 17.5k new jobs is expected as the effect of the end of “Jobkeeper” payments kicks in. With the relative success of Australia in combating the COVID pandemic and an accommodative RBA, the Australian labour market has rebounded to almost pre-pandemic levels.

We could see some volatility in AUD if there is a figure well outside of expectation, a miss should see AUD fall, as this increases the probability of continuing easy money policies from the RBA and vice versa.

Tonight, the weekly US Unemployment claims are released where a decline to 453k is expected from the previous weeks 473k.

Also, Bank of Canada Governor Tiff Macklem is due to hold a press conference about the Financial System Review. With the recent strength in the CAD due to tapering by the BoC, FX traders will be looking for clues in any future BoC moves.

Cryptocurrencies

Bitcoin and other major Cryptos had an exceptionally volatile session overnight. Crypto accelerated its recent decline as a slew of negative headlines and catalysts caught up with the asset class.

Building on Teslas founder Elon Musk’s disparaging tweets last week we saw a new round of regulations by the Chinese government that were a hammer blow to investor confidence in cryptos.

BTCUSD dropped to under 30k USD at one point, before a strong rebound credited to another Elon Musk tweet where he implied Tesla were holding their Bitcoin with a “Diamond Hands” tweet.

The rebound has been short-lived however, BTCUSD has resumed its slide this morning and now trading at around 36k USD.

 

Friday, 21 May 2023 – Indicative Index Dividends
^{Dividends are in Points}

Symbol	Dividend
ASX200	0
WS30	0
US500	0.089
US2000	0.099
NDX100	0
CAC40	0
STOXX50	0
ESP35	0
ITA40	0
FTSE100	0
DAX30	0
HK50	0
JP225	0
INDIA50	0