CNBC Daily Open: A U.S. yen intervention dressed in euros
Reports suggest that Washington sold euros to fund its intervention to avoid impacting the sensitive U.S Treasury market.
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Money in different currency bills - U.S. Dollar, Chinese Renminbi Yuan, Japanese Yen, European Euro
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Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.
The U.S. intervention to bolster the yen last week may have more global significance than it appears, as reports suggest that Washington sold euros to fund this intervention to avoid any negative impact on the sensitive Treasury market.
It's also earnings galore around the globe, with Amazon, HSBC and Aramco some of the big names that have reported today.
What you need to know today
Instead of selling dollars to help Japan prop up the yen as it had in previous interventions, the U.S. reportedly sold euros instead to fund the currency-buying operation, thereby weakening the greenback against the euro.
What could be the reason? One possibility is that Washington wants to avoid destabilizing the sensitive Treasury markets. Industry veterans told CNBC that one of Washington's biggest concerns was avoiding a scenario where Japan would need to dump large quantities of Treasurys to finance unilateral intervention.
The euro had strengthened to a high of 1.1558 against the greenback on Monday, hitting its strongest level in almost two months.
Earnings galore
In the U.S, Amazon hit a new all-time high on Monday, putting its market cap over the $3 trillion threshold for the first time following a better-than-expected earnings report last week.
But this may be distorted by its stake in AI companies like OpenAI and Anthropic. Microsoft, Amazon and Alphabet booked sizable investment gains in the most recent quarter thanks to stakes in Anthropic and OpenAI, and in one case, SpaceX.
Anthropic and OpenAI have both seen soaring valuations in private markets, with each valued just south of $1 trillion amid the ongoing AI boom.
HSBC, Europe's second-largest bank by assets, reported a results beat, with second-quarter pre-tax profit of $10.1 billion on Tuesday, exceeding analysts' estimates on the back of stronger growth in banking net interest income and other higher fees.
Second-quarter profit before tax rose 60% year-on-year, also helped by a net favorable impact from notable items of $2.6 billion, the company said.
Middle East oil giant Saudi Aramco on Tuesday reported a jump in second-quarter profit, beating expectations and following a period of severe disruption through the Strait of Hormuz.
The results come as oil supermajors have reported blowout quarterly profits, benefitting from higher fossil fuel prices amid hostilities between the U.S. and Iran.
— Lim Hui Jie
