Summary:

  • US indices rallied on Tuesday fuelled by Netflix, UnitedHealth and Amazon
  • Japanese currency declines in anticipation of talks between US President Donald Trump and Japan’s Prime Minister Shinzo Abe
  • USDJPY keeps moving within an upward channel, but a pivotal resistance remains in place

US stock indices managed to close yesterday’s trading with decent gains fuelled by performance of several stocks with Netflix leading the rally. The company added as much as 9% climbing its highest level on the history after the announcement which smashed analysts’ quarterly subscriber estimates. UnitedHealth was also among the best stocks on Tuesday as the company posted a 31% increase in profit for its latest quarter and decided to lift its earnings outlook for the entire year. In turn, Amazon turned out to be the largest driver for the SP500 (US500)  as it jumped 4% getting help from Netflix’s results and also from signs that the US Supreme Court is hesitant to let states force out-of-state online retailers to collect sales taxes on purchases. Finally let us recall that analysts expect the SP500 all companies profit to rise 18.6% in the first quarter which if so could be the most impressive jump in seven years. The decent rally on Wall Street seems to be helping Asian equities as well as the Japanese NIKKEI (JAP225) is rising 1.4% just a while before the close. Elsewhere, the Chinese Hang Seng (CHNComp) is adding 0.6% and the Australian main index is going up 0.3%.

link do file download linkThe US500 smashed a supply area yesterday and closed much above it for the first time since 21 March. Technically it looks good for bulls as they could hope for an extended increase even slightly above 2800 points. Source: xStation5

On the currency front one may notice that the Japanese yen is losing a bit more than 0.3% in early trading which has been the largest move so far. The yen could be losing ground due to upcoming talks (later this week) between US President Donald Trump and Japan’s Prime Minister Shinzo Abe in a summit at Mar-a-Lago, the Trump’s Florida resort. In the face of a notable trade surplus Japan holds with the US there were some assumptions that Trump could call on Abe as well as Bank of Japan to end with weak yen policy in order to dial back trade imbalances between the countries albeit those risks have abated to some extent recently. Meantime, Japanese officials are reportedly said that they will resist two-way trade deals with the US at the summit, even if it reduces the chance of gaining exemptions from lately introduced tariffs on steel and aluminium.

link do file download linkThe Japanese yen is weakening in the morning ahead of bilateral Trump-Abe talks. However, the pair does not look to be already geared up for any major breakout as it keeps trading quite a long way off from its crucial resistance at 108.30. In the longer-term one may expect the pair could be heading lower due to relative valuation of both currencies. Source: xStation5