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Yields Spike Amid Hotter Than Expected CPI

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STATE OF THE MARKETS

Yields spike amid hotter than expected CPI. US stocks dip lower on Wednesday after news of hotter than expected CPI (9.1% vs 8.8%) while short term yield of 1Y (3.21%) note spiked higher than the longer 30Y (3.07%). Dow (-0.67%), S&P (-0.45%) and Nasdaq (-0.15%), including Russell (-0.12%) edged lower as demand for Dollar firmed amid higher yields. Talks of more aggressive hikes sent the Dollar index past the 108.50 minor handle.

In the commodity markets, crude was little changed at $94.15/bl as New York closed while inflation concerns pushed gold to close higher above $1,735.25/oz. Elsewhere, Iron ore rebounded to $111.05/tn as short sellers took profit.

In the FX space, short term traders were back into selling Yen, Kiwi and Aussie while buying Swiss, Loonie and Euro. Demand for Loonie returned across the board after the Bank of Canada surprised the markets with a 100 basis point hike. Long term sentiments were little changed.

On Thursday, markets expect a higher volatility as earnings seasons kicked in with reports from Taiwan Semiconductor (TSM), JP Morgan (JPM), Morgan Stanley (MS), Cintas Corp (CTAS), First Republic Bank (FRC), Ericsson (ERIC), Conagra Brands (CAG) and American Outdoor (AOUT). Market moving economic calendar includes jobless claims, Empire State manufacturing index, industrial production and consumer sentiments.


G8 CURRENCIES SENTIMENTS

ST CHF CAD EUR USD GBP AUD NZD JPY ST
MT CAD USD GBP AUD NZD CHF JPY EUR MT
LT USD CHF CAD JPY GBP NZD EUR AUD LT
** ST refers to Short-Term daily turnover, MT is Medium Term weekly 
and LT refers to Long-Term monthly turnover.

WALL ST MOST ACTIVE

TICKER LAST PRICE

% CHANGE

VOLUME 90 DAYS AVG
IS 3.28 + 47.09 256,064.1K 5,665.6K
TQQQ 25.19 – 0.63 179,525.1K 154,006.1K
SQQQ 55.12 + 0.62 136,220.1K 111,989.3K
SPY 378.83 – 0.53 83,970.1K 98,263.6K
AMD 77.52 + 1.52 79,171.9K 105,045.9K
QQQ 285.65 + 0.21 73,576.4K 75,234.7K
AAPL 145.49 – 0.25 71,094.7K 92,734.8K
SOXL 13.29 + 2.47 69,735.0K 55,954.5K
GOVT 23.97 + 0.19 68,342.6K 10,851.7K
AMZN 110.40 + 1.08 61,249.5K 82,845.0K
** % Change here refers to price vs previous day price

WALL ST TOP FLOWS

TICKER LAST PRICE

VOLUME

% CHANGE FUNDS FLOW $
TSLA 711.12 32,545.9K + 2.84 23,144.0M
AAPL 145.49 71,094.7K – 11.07 10,343.6M
NVDA 151.64 52,069.0K + 1.48 7,895.7M
MSFT 252.72 29,475.9K – 6.70 7,449.1M
AMZN 110.40 61,249.5K + 12.03 6,761.9M
AMD 77.52 79,171.9K + 12.04 6,137.4M
GOOGL 2,227.07 2,179.1K + 14.60 4,853.0M
GOOG 2,243.74 1,943.7K + 23.34 4,361.2M
META 163.49 16,527.8K + 47.15 2,702.1M
NFLX 176.56 12,710.3K + 44.66 2,244.1M
** % change here refers to volume vs. 20 days average volume.

TOP 5 BLOCK ORDERS

TICKER PRICE TYPE VOL/OI FUNDS FLOW
LAZR 6.00 stock/options 234.69 34.8M
RIG 2.70 stock/options 147.19 58.3M
CMCSA 39.88 stocks/options 78.70 677.7M
NQ 11,708.50 NASDAQ futures 20,576 240.9M
YM 30,668.00 DOW futures 6,375 195.5M

OUR PICK – CAD/JPY

Among best short term yields. Latest hike from the Bank of Canada put Loonie at par with Kiwi at 2.50% and the short term yields are among the best. Sentiments indicate a short and medium term rebound is on the card. Long term, however, is prone to reversal as the exchange rate is already at 2015 and 2008 high.

HORIZON STRATEGY SL TP1 TP2
Short-Term Buy 105.00 106.20 106.60
Medium-Term Buy 105.00 106.60 107.00
Long-Term Flat

 

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. 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.