Category Archive: 4) FX Trends

Main Author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.

Stocks Hit as Central Banks Brandish Anti-Inflation Efforts

Overview: Central banks are committed to combatting inflation even as the economies weaken. This is taking a toll on investor sentiment and is dragging down equities.

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Spanish Inflation Shocks

Overview: The sharp sell-off in US equities yesterday, led by tech, is weighing on today’s activity. Most of the large Asia Pacific markets excluding Japan and India lost more than 1% today.

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No Turn Around Tuesday

Overview: The global capital markets are calm today. Most of the large bourses in the Asia Pacific extended yesterday’s gain. Europe’s Stoxx 600 is advancing for the third consecutive session and is near two-and-a-half week highs.

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Consolidation in FX Featured

Overview: The strong equity market rally seen at the end of last week is carrying into today’s activity. Most of the large markets in Asia Pacific rose by at least 1%.

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The Dollar: Don’t Get too Far Ahead of the Story

The most important development in foreign exchange probably took place in the interest rate market last week. A series of disappointing US economic data and the Fed's "unconditional" commitment to rein in inflation have heightened concerns that economic weakness will limit the Fed's ability to hike rates. 

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The End Game Approaches

The pendulum of market sentiment swings dramatically.  It has swung from nearly everyone and their sister complaining that the Federal Reserve was lagging behind the surge in prices to fear of a recession.

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Risk Appetites Improve Ahead of the Weekend

Overview: Equities are higher and bonds lower as the week's activity winds down. Asia Pacific markets rallied, paced by more than 2% gains in Hong Kong and South Korea.

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Johnson’s Ability to Lead Tories into Victory at Risk with Today’s By-Elections

Overview: Asia Pacific equities were mixed. Gains were recorded in China, Hong Kong, Australia, and India, among the large markets, while Japan was mostly flat and South Korea and Taiwan shares fell.

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Risk Appetites are Fickle

Overview: Yesterday’s strong US equity gains failed to carry over into today’s session. Japanese and Australian shares fared the best among the large Asia Pacific market, with the Nikkei off less than 0.4% and the ASX off less than 0.25%.

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Equities Jump, Dollar Slips, and European Yields Drop

Stocks are rallying. Nearly all the large bourses in the Asia Pacific region rose with China being the noted exception.

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US Holiday Facilitates Consolidative Tone

Overview: Most equity markets in the Asia Pacific region lost ground today. China’s Shenzhen, Hong Kong, and India were notable exceptions.

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With the Central Bank Pivots Discounted, Will the Forex Market Consolidate?

The dramatic moves in the money market were investors discounting the acceleration of the tightening cycle among the major economies. 

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Is a 0.3% Miss on Headline CPI Really Worth a 77 bp Rise in the December Fed Funds Yield?

Overview: Better than expected Chinese data and an unscheduled ECB meeting are the highlights ahead of the North American session that features the May US retail sales report and other high frequency data before the outcome of the FOMC meeting.

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Prospects of Aggressive Tightening Sends Shock Waves through the Capital Markets

Overview: The markets' evolving expectations of a more aggressive monetary policy is not limited to the Federal Reserve, where the terminal rate is now straddling the 4% area, around 100 bp above late May levels.

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Dollar Jumps, Stocks and Bonds Slide

The prospect of a more aggressive Federal Reserve policy has spurred a sharp sell-off in global equities and bonds and sent the dollar sharply higher. The large Asia Pacific bourses were off mostly 2%-4%.

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Greenback Poised to Challenge May Highs

The firmer than expected US CPI did not change expectations that the Federal Reserve will hike the Fed funds target by 50 bp on June 15. What it did was boost the chances that the 50 bp steps will continue through at least November.

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Fed 50, BOE 25, and the BOJ to Stand Pat: Week Ahead

Three G7 central banks meet in the coming days, and they dominate the macro stage. The Federal Reserve's meeting concludes on Wednesday, the Bank of England on Thursday, and the Bank of Japan on Friday.

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Over to the ECB

Overview: Equity markets in Asia Pacific and Europe are weaker.  The main exception in Asia Pacific was India, where the market rose by about 0.75%. 

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The Greenback Bounces Back

Overview: After modest US equity gains yesterday, the weaker yen and Beijing’s approval of 60 new video games helped lift most of the large markets in the Asia Pacific region.

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Reserve Bank of Australia Surprises, but Aussie Struggles

Overview: The jump in US interest rates helped lift the greenback to new 20-year highs against the Japanese yen and pushed the euro back below $1.07. US equities saw initially strong gains pared and this set the tone for today’s activity.

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