USD Looks to the Fed Before Tomorrow’s Inflation Data, Disney & Uber Reports
USD/JPY => The pair trades steadily around 115.50
Disney => The stock trades 8% lower in 2022
Uber => The rises 10% in 3 days
USD/JPY Look to Fed Speak & Japanese PPI
USD/JPY rose on Tuesday, paring small losses from the start of the week. The US dollar gained ground, supported by the expectation of multi-interest rate hikes by the Fed across the year and central bank divergence. The BoJ is not expected to tighten monetary policy this year. Today data from the US is limited although comments by Fed official Loretta Mester could attract some attention. The markets will be keen to see how quickly she sees the Fed raising interest rates. Thursday’s US inflation data is the key focus this week. Later today, attention could turn towards Japanese producer price inflation. High factory-gate inflation could bolster BoJ’s tightening prospects.
| Japanese PPI YoY | Expected: 8.5% (0) | Previous: 8.5% |
What’s next for USD/JPY?
USDJPY is extending gains from the 100 sma 1113.67 reached January 25. The move higher has re-taken the 50 sma and tested key resistance at 115.55/60 a zone that has capped gains on several occasions over the past three months. The RSI is supportive of further upside whilst it remains out of the overbought territory. Buyers need to break over 115.55 to bring 116.35 and fresh multi-year highs into focus. On the downside, a move below 115.00 would expose the 50 sma and the 100 sma at 113.90. A move below 113.60 the June 21 & 17 low could see sellers gain traction.
Disney Q4 Earnings Preview
The Disney share price has fallen 8% so far in 2022 and has dropped almost 20% over the past 6 months, underperforming the broader S&P500. The selloff comes as the market questions the valuation of the business, particularly its Disney+ streaming business and its outlook as economies re-open. Let’s not forget that Netflix share plummeted 20% post results on a weaker Q1 outlook. Will Disney+ suffer the same fate? The big difference between Netflix and Disney is that Disney is more diversified and has multiple revenue streams. Disney has managed to beat Wall Street estimates for the past few quarters. Wall Street expects EPS $0.62, up from a loss of $0.32 per share, on revenue of $18.87 billion, up from $16.25 billion.
Uber Q4 Earnings Preview
Uber Technologies had a tough ride through the pandemic. Whilst the food delivery business has grown, on the mobility side, Uber’s core operation has suffered. The group continues to operate below pre-pandemic levels, mobility demand is starting to ramp up. Last quarter Uber hit a milestone reporting its first-ever quarterly profit since going public in 2019. Uber said it expects to post a second straight quarterly profit of adjusted Ebitda of $25-$75 million. Gross bookings are expected to be $25-$26 billion thanks to the continued recovery in its ride operations and growth in its delivery arm, although at a slower rate. Costs will be in focus as UK and US minimum wage and benefit requirements come into play. EPS of $-0.33 on revenue of $5.35 billion is expected.
Support can be found at 35.00 (December low) and 32.86 (2022 low)
Resistance for the stock can be seen at 39.23 (50 sma) and 44.35 (December high)
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