Morning Bid: Yen lift, dollar drift

By Mike Dolan

Feb 10 -

What matters successful U.S. and planetary markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

The dollar is backmost connected the descent this week, adjacent arsenic immoderate assurance returns to the broader stocks universe, with tech shares rallying and MSCI's all-country scale jumping to caller ​records.

I’ll get into that and much below.

But first, cheque retired my latest file connected the 1 cardinal awesome being clouded by 2026's chaotic ‌news flow.

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YEN LIFT, ‌DOLLAR DRIFT

Three factors look to beryllium weighing connected the greenback erstwhile again - a post-election surge successful the yen, accelerating gains successful China's yuan to adjacent three-year highs, and immoderate marketplace trepidation astir a anemic U.S. employment study tomorrow.

The yen's bounceback appears to beryllium a lawsuit of 'sell the rumor, bargain the fact' surrounding Prime Ministers Sanae Takaichi's fiscal plans. The currency had been floundering for months, but present it seems much comfy with the maturation and involvement complaint implications of caller stimulus alongside a ⁠more unchangeable governmental horizon.

The yuan surge comes up of ‌the Lunar New Year holidays adjacent week, and is apt being supported by reports that Chinese regulators person warned section banks and investors astir over-concentrated holdings of U.S. Treasury bonds and the dollar. The U.S. currency is astatine its lowest constituent since ‍May 2023, having fallen astir 6% against the renminbi implicit the past year.

The different large absorption yesterday was the bounceback successful U.S. mega-cap tech stocks aft past week’s wobble implicit quality of capex plans totalling much than $650 cardinal for 2026.

Some of that will, of course, beryllium debt-financed. Alphabet announced connected Monday that it would rise different $15 cardinal successful high-grade bonds. This ​follows Oracle’s announcement of a caller indebtedness merchantability past week. The 5 large AI hyperscalers issued $121 cardinal successful U.S. bonds past year, compared with an mean of $28 ‌billion per twelvemonth successful the erstwhile 4 years.

Meantime, President Trump's medication plans to spare tech giants specified arsenic Amazon, Google and Microsoft from upcoming tariffs connected chips arsenic the hyperscalers physique retired their AI information centers, according to the Financial Times.

Elsewhere, UK markets had a nervy time connected Monday arsenic play intensified astir Prime Minister Keir Starmer’s assignment of Epstein-linked Lord Peter Mandelson arsenic U.S. ambassador successful 2025. But the ruling Labour Party backed Starmer precocious connected Monday, calming some sterling and gilts.