- Prior was 51.2
- Manufacturing 57.5 vs 56.0 expected
- Prior manufacturing index 55.5
- Composite 56.0 vs 51.1 prior (prior was an 18 month low)
This is a very strong report relative to expectations but it mostly just erases a dip in January that was likely related to omicron.
From IHS Markit chief economist Chris Williamson:
“The pace of economic growth accelerated sharply in February as virus containment measures, tightened to fight the Omicron wave, were scaled back. Demand was reported to have revived and supply constraints, both in terms of component availability and staff shortages, moderated.
“With demand rebounding and firms seeing a relatively modest impact on order books from the Omicron wave, future output expectations improved to the highest for 15 months, and jobs growth accelerated to the highest since last May, adding to the upbeat picture.
“The service sector rebounded especially impressively, accompanied by a more muted upturn in manufacturing. Goods producers remain hamstrung by supply shortages which, although easing to the lowest since last May, continued to severely limit production growth, resulting in a further large rise in backlogs of work.
“The supply constraints also contributed to a further marked increase in firms’ costs, which rose yet again at another near-record pace in February. Increasing numbers of companies sought to pass these higher costs on to customers, resulting in the largest increase in average prices charged yet recorded by the survey.
“With growth rebounding sharply amid resurgent demand, and price pressures rising again to an all-time high, the survey will add to expectations of a more aggressive policy tightening by the FOMC.”
USD/
JPY
JPY
The Japanese yen (JPY) is the official currency of Japan and at the time of writing is the third most-traded currency in the world behind only the US dollar and euro.The JPY is used extensively as a reserve currency and is relied upon by forex traders as a safe haven currency.Originally implemented in 1871, the JPY has had a long history and has survived multiple world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the full oversight of the JPY by the Japanese government only in 1971.Japan has historically maintained a policy of currency intervention, continuing to this day. The BoJ also adheres to a policy of zero to near-zero interest rates and the Japanese government has previously had a strict anti-inflation policyWhat Factors Affect the JPY?The aforementioned role of the BoJ has dramatically shaped the JPY in forex markets. Any further changes in monetary policy by the central bank are closely watched by forex traders.Additionally, the Overnight Call Rate is the key short-term inter-bank rate. The BoJ utilizes the call rate to signal monetary policy changes, which in turn impact the JPY.The BoJ also purchases both 10- and 20-year Japanese government bonds (JGBs) on a monthly basis in order to inject liquidity into the monetary system. The consequent yield on the benchmark 10-year JGBs helps serve as a key indicator of long-term interest rates.Economic data is also very important to the JPY. The most important of these releases in Japan are gross domestic product (GDP), the Tankan survey (quarterly business sentiment and expectations survey), international trade, readings of unemployment, industrial production, and money supply (M2+CDs).
The Japanese yen (JPY) is the official currency of Japan and at the time of writing is the third most-traded currency in the world behind only the US dollar and euro.The JPY is used extensively as a reserve currency and is relied upon by forex traders as a safe haven currency.Originally implemented in 1871, the JPY has had a long history and has survived multiple world wars and other events. This was followed by the creation of the Bank of Japan (BoJ) in 1882 and the full oversight of the JPY by the Japanese government only in 1971.Japan has historically maintained a policy of currency intervention, continuing to this day. The BoJ also adheres to a policy of zero to near-zero interest rates and the Japanese government has previously had a strict anti-inflation policyWhat Factors Affect the JPY?The aforementioned role of the BoJ has dramatically shaped the JPY in forex markets. Any further changes in monetary policy by the central bank are closely watched by forex traders.Additionally, the Overnight Call Rate is the key short-term inter-bank rate. The BoJ utilizes the call rate to signal monetary policy changes, which in turn impact the JPY.The BoJ also purchases both 10- and 20-year Japanese government bonds (JGBs) on a monthly basis in order to inject liquidity into the monetary system. The consequent yield on the benchmark 10-year JGBs helps serve as a key indicator of long-term interest rates.Economic data is also very important to the JPY. The most important of these releases in Japan are gross domestic product (GDP), the Tankan survey (quarterly business sentiment and expectations survey), international trade, readings of unemployment, industrial production, and money supply (M2+CDs).
Read this Term strengthened to a session high after this release but note that
equities
Equities
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.Equities have become a popular form of investing. Despite their risk, there are many reasons for individuals investing in equities. Equity holders can also benefit through dividends, as these differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country. Why are Equities so Popular?In the United States and many developed countries, equity markets are amongst the largest in terms of transactions, investors, and turnover, adding to their growing popularity in recent decades.The appeal of equities is the potential for high returns. Most portfolios feature some portion of equity exposure for growth, which as mentioned also carries a larger degree of risk.Equities are also popular with younger investors who can largely afford to take on higher levels of equity exposure, i.e. risk. As such, these individuals have more stocks in their portfolio because of their potential for returns over time. However, individuals looking to retire or rely on a more stabilized and risk-averse portfolio often reduce their equity exposure.This stance is hardly novel and can explain trading habits among many investors. For example, holders of retirement accounts typically will shift at least a portion of their investments from stocks to bonds or fixed-income as they get older.
Equities can be defined as stocks or shares in a company that investors can buy or sell. For example, when you buy a stock, you are purchasing equity, thereby becoming a partial owner of shares in a specific company or fund.Equities do not pay a fixed interest rate, and as such are not considered guaranteed income. Consequently, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.Equities have become a popular form of investing. Despite their risk, there are many reasons for individuals investing in equities. Equity holders can also benefit through dividends, as these differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country. Why are Equities so Popular?In the United States and many developed countries, equity markets are amongst the largest in terms of transactions, investors, and turnover, adding to their growing popularity in recent decades.The appeal of equities is the potential for high returns. Most portfolios feature some portion of equity exposure for growth, which as mentioned also carries a larger degree of risk.Equities are also popular with younger investors who can largely afford to take on higher levels of equity exposure, i.e. risk. As such, these individuals have more stocks in their portfolio because of their potential for returns over time. However, individuals looking to retire or rely on a more stabilized and risk-averse portfolio often reduce their equity exposure.This stance is hardly novel and can explain trading habits among many investors. For example, holders of retirement accounts typically will shift at least a portion of their investments from stocks to bonds or fixed-income as they get older.
Read this Term have been rebounding from weakness at the open at the same time.
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