S&P 500 hits record high, silver price remains bid while USD/JPY stays sidelined
S&P 500 hits record high, silver price nears 13-year high while USD/JPY continues to sideways trade ahead of US non-farm payrolls.
Macro comment
The S&P 500 closed at a record high after US economic data suggested a slowdown in the labour market without signalling weakness in overall growth. Softer jobless claims and subdued private hiring figures reinforced expectations that the Federal Reserve (Fed) is on track to lower interest rates in September. Investors interpreted the numbers as evidence that inflationary pressures are easing, while the economy remains resilient enough to avoid a sharp downturn.
This optimism on Wall Street carried over to Asian markets, where major indices followed the US rally. Japan, Taiwan, and China all posted gains, reflecting growing confidence that a Fed rate cut will provide further support to global growth.
US Treasury yields fell to four-month lows as bond traders priced in an almost certain quarter-point rate cut in September. Market participants now see a 95% probability that the Fed will ease policy, further anchoring expectations for a shift away from the aggressive tightening cycle of the past two years.
S&P 500 trades in record highs
The S&P 500 is trading back in the 6,500 region whilst trying to overcome its late August record high at 6,508. Further up lies the 6,600 mark.
Potential slips may find support around the mid-August high at 6,481 and the 22 August peak at 6,479.
S&P 500 daily candlestick chart
USD/JPY stays sidelined
USD/JPY continues to range trade above its ¥146.22 mid-August low and below its 200-day simple moving average (SMA) at ¥148.79 and its mid-July high at ¥149.18.
If overcome, the August peak at ¥150.92 would be back in sight.
A slip through Thursday's ¥147.79 low may lead to the 55-day SMA at ¥147.26 being revisited.
USD/JPY daily candlestick chart
Silver heads back towards 13-year high
The price of silver is seen heading higher again, having recovered from Thursday's $40.4074 per troy ounce low.
The next upside target is the 3 September high at $41.4730, followed by August 2011 peak at $44.2183 and the April 2011 high at $49.8142.
Immediate upside pressure will be maintained while Thursday's low at $40.4074 underpins.
Silver daily candlestick chart
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