GBP/JPY - Stocks Rebound Further As Fear Subsides - 12/10/2021 (GMT)

STATE OF THE MARKETS
Stocks rebound further as fear subsides. US stocks continue to rebound on Monday after another sell-off on Friday as fear on Omicron variant eased and rising inflation concerns might delay Fed’s tapering. Dow (+1.87%), Nasdaq (+0.93%), and S&P (+1.17%) including Russell (+2.05%) rebounded further as yields and Dollar ticked higher. The 10Y benchmark reclaimed the 1.45% as the Dollar (DXY) edged up to 96.30 mark.

In the commodities market, crude continues to advance past $71/bl after reports showed that global lockdowns are less likely as Omicron is mild. Buyers continue to defend gold at $1,780/oz ahead of US CPI reading this Friday. Elsewhere iron ore continued its upward trajectory, settling at $103.70/tn as markets expect the US infrastructure project to start in 2022.

In the FX space, Aussie flipped to demand with Sterling, Yen and Dollar in the short term accounts as risk sentiments improved. Medium term traders turned more bearish as the Swiss took the lead in demand from Yen. Long term sentiments were little changed. On Tuesday, markets look for earnings reports from AutoZone (AZO), SentinelOne (S), Toll Brothers (TOL), Renesola (SOL) and Casey’s (CASY) as well as the latest US productivity and costs.

OUR PICK – GBP/JPY

Riding the block orders. $20 million worth of block orders were noted for the Guppy in the futures market around the ¥150 handle that we intend to ride with, though BoE was a little iffy on the potential of a rate hike this month. We see short to medium term rebound as speculators turned optimist.

Risk Disclaimer:
This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities/oz. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.