NEW YORK, April 29 - U.S. stocks followed their European counterparts higher on Monday and the yen surged amid suspected intervention as investors embarked on what promises to be an action-packed week.
"The risk is that you have these asynchronous central bank moves where some are still seeing the shadow inflation on the cave wall and are afraid to start cutting rates, like the Fed," said Brian Nick, senior investment strategist at Macro Institute in New York."Then you have central banks that are effectively tightening policy through currency interventions or in the case of Bank of Japan, getting rid of some of their yield curve control.
Nick said enough data was coming this week to allow to determine whether the economy was still running too hot because of the labor market."We'll have a much better picture of whether conversations about Fed rate hikes will creep back into the dialogue or whether everybody's going to be able to calm down."
European shares touched a two-week high, building on the previous week's gains with economic data and the Fed's rate decision in focus. Japan's yen jumped as much as 5 yen against the dollar, sparking suspicions that Tokyo intervened in the currency market for the first time in 18 months.