Japan unveiled a stimulus package worth approximately $490 billion
On Thursday, fresh economic data out of the United States showed that initial filings for unemployment insurance fell slightly to 268,000 last week, the lowest level since March 2020, and the seventh straight weekly decline. Meanwhile, Nvidia shares surged 8.25% after the company reported better-than-expected quarterly earnings and delivered a bullish revenue forecast for the current quarter. Against this backdrop, the S&P 500 and the Nasdaq Composite were 0.3% and 0.5% higher, respectively, while the Dow Jones fell 0.1%.
Today in Asia, the sentiment was mostly bearish as disappointing earnings from Alibaba heightened worries about slowing growth in the country. The Chinese e-commerce giant saw its shares tumbling over 10% after its second-quarter results missed expectations and said it forecasts weak results in the current quarter. As such, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.44%. Meanwhile, the Japanese Nikkei 225 climbed 0.5% after Prime Minister Fumio Kishida unveiled a stimulus package worth approximately $490 billion.
European equities opened higher on Friday, cheering dovish comments from the ECB Governor. Lagarde said that inflation rates to increase further until year-end, but upside drivers are to fade over the medium-term. Furthermore, she highlighted that it does not make sense to tighten policy when inflation pressures are expected to fade.
Against this backdrop, the euro came under renewed selling pressure to erase yesterday’s gains early in Europe. The pair is back targeting the 1.1300 figure, also pressured by the resurgent dollar demand. However, should this level withstand the current pressure, the pair may see a bounce in the short term. The USD index is back on the defensive today following a short-lived and limited bearish correction and looks set to finish the trading week on a strong footing.