ORLANDO, Florida, Jan 27 (Reuters) – World stocks and the S&P 500 hit new highs on Tuesday, boosted by a flood of strong U.S. earnings reports, while anxiety over U.S. President Donald Trump’s policy direction sent safe-haven gold to fresh peaks and sank the dollar to a four-year low.
More on that below. In my column today I look at why Japanese authorities might still unilaterally intervene in the FX market to support the yen, even though the chances of joint action with the United States are probably quite remote.
If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.
1. U.S. consumer confidence dives to a more than11-1/2-year low 2. World’s ‘middle powers’ de-risking from America: MikeDolan 3. India, EU reach landmark trade deal, tariffs to beslashed on most goods 4. In the Market: Wall Street’s banking on next Fed chairto stand up to Trump 5. Chinese industrial profit rises in 2025, first time infour years
Today’s Key Market Moves
* STOCKS: S&P 500 closes in on 7000 points, South Korea+3% to new high, Brazil also hits fresh records. * SECTORS/SHARES: Nine sectors in the S&P 500 rise, led bytech, utilities. Two fall – healthcare, energy. General Motors+9%, UnitedHealth Group -20%. * FX: Dollar selloff snowballs. Swiss franc at 11-yearhigh, cable at 4-year high, euro breaks above $1.20 to new4-year high, yen powers towards 152/$. * BONDS: U.S. Treasury yields up 4 bps at the long end,steepening the curve. * COMMODITIES/METALS: Oil up ~3%, gold and silver reboundbut platinum and palladium slide 3-5%.
Today’s Talking Points
* Dollar torpedoed …
The U.S. dollar is under extreme pressure, with the latest wave of selling pushing it to new four-year lows on a broad basis. Unnerved by geopolitics, Trump’s policies, Washington wanting a lower exchange rate, or worries over Fed independence, investors are dumping the greenback.
Like last year, the “Sell America” trade is manifesting in FX – U.S. stocks are probing record highs and Treasuries are pretty steady. Short-term technicals and momentum are not on the dollar’s side, and longer term, the dollar still looks expensive on a broad real effective exchange rate basis.
* … while safe-haven Swissie soars
Given the dollar’s travails, and with the Japanese yen suffering from domestic policy uncertainty and a plunging bond market, the Swiss franc is living up to its traditional FX status as the safe-haven king.
On Tuesday, euro/Swiss fell to 0.9163 francs. That’s the lowest since January 15, 2015, when the SNB abandoned its exchange rate cap, sending the franc up as much as 30%. Excluding that day, the Swissie has never been stronger against the euro. It is also at an 11-year high against the dollar.
