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  • DXY moves to fresh cycle highs and props-up  USD/JPY.
  • USDJPY steady on 108 handle, with markets somewhat quiet considering  Chinese markets closed.
  • However, US September manufacturing survey coming up has the potential to shift things up a gear.

USD/JPY is currently trading at 108.09 and flat in the Tokyo open having risen from 107.75 to 108.15 highs overnight as US stocks ended the month in the green.

It’s somewhat quiet out there today considering we will not be seeing Chinese markets open with it being China’s National Day holidays that started today,  running to 7 October inclusive.  There is, however, a keen focus on trade talk expectations as well as with key US data coming up, including Nonfarm Payrolls at the end of the week.  

Yields, stocks and US Dollar recover – DXY hits fresh cycle highs

For the meantime, US 2-year treasury yields and the 10’s were firmer overnight, supportive the DXY to fresh cycle highs while US stocks recovered and closed into the green.  US 2-year treasury yields rose from 1.62% to 1.65% and back while the 10-year yield climbed 1.68% to 1.71%.  

As for stocks, the Dow Jones Industrial Average, DJIA, ended 96.58 points higher to finish at 26,916.83, while the S&P 500 index climbed 14.95 points, or 0.5%, to close at 2,976.74. The Nasdaq Composite Index ended at 7,999.34, for a gain of 0.1%.  The stock markt was supported on some back peddling with respect to trade talks coupled with Fed rate cut extractions. “Markets are pricing 8bp of easing at the 31 October meeting and a terminal rate of 1.14% (vs 1.88% currently),” analysts at Westpac explained.  

Looking to the immediate future, the US September manufacturing survey from the Institute for Supply Management (ISM) will be coming up tonight in the NY session and could be a catalyst for some price action and considering the Nonfarm Payrolls at the end of the week – there will b a lot of attention paid to it. There will also be Fedspeak from Chicago’s Evans (a dove). We will also have Vice Chair Clarida speaking.  

USD/JPY levels