Global Retail Investors Bullish on USD & Stocks, Expect Fed Hike in H2

The giant Tokyo-based global financial broker, Monex, has released its sixteenth sentiment survey, showing that traders worldwide are still optimistic

New York Stock Exchange (Photo: Bloomberg)
New York Stock Exchange (Photo: Bloomberg)

The Japanese financial trading giant Monex released today its sixteenth retail investor survey, revealing, among other things, that in all the regions covered–Japan, the US and China–retail investors still expect U.S stock markets to be bullish despite recent records. The survey measured the sentiments of Monex clients globally with 1,070 Japanese, 95 American and 443 Chinese people taking part.

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Despite a relative drop, a majority of traders who took part in the survey expect that the USD will be the strongest currency over the next three months. Around 70% of U.S. respondents (80% in the previous survey) and around 70% of Hong Kong respondents (60% in the previous survey) chose the U.S. dollar as the most likely to rise sharply.

In Japan, it also seems the government has convinced a small percentage that it can drive the currency lower. The percentage of Japanese retail investors forecasting a stronger dollar and a weaker yen rose 2 percentage points (from 52% to 54%) from the previous survey. The percentage of retail investors forecasting a stronger yen declined 2 percentage points (from 15% to 13%).

Especially relevant to traders, Monex asked investors in each region about the timing of an expected Fed rate hike. The largest percentage of U.S. retail investors expect that a rate hike will be in the October-December quarter. In Japan and Hong Kong, the largest percentage of retail investors expect that it will be in the July-September quarter.

The broker determined that there will be a rate hike, and with speculation varying, volatility on the U.S. stock market may increase. An increase in volatility means both risk and opportunity for investors and Monex says it hope that its clients will take advantage of a rate hike in the United States, “an investment opportunity that comes only once every several years.”

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