Category Archive: 4.) Marc to Market

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Week Ahead: Rising US Rates Underpin Greenback

2026-05-16

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2026-05-16

The US economy appears to be re-accelerating here in Q2 after nearly grinding to a halt in Q1 (0.5% annualized pace). April US CPI and PPI were more elevated than expected. The anticipated average effective Fed funds rate in December rose more than 15 bp in the past week and is up slightly more than … Continue reading...

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Greenback Breaks Higher, Stocks and Bonds Lower

2026-05-15

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2026-05-15

The US dollar has extended its gains against most currencies today. What is seen as a successful US-China summit and a swing in expectations for Fed policy are aiding the greenback. The anticipated year-end effective Fed funds rate has risen by a dozen basis points this week and the two-year Treasury yield is up 16 …

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US Dollar Threatening to Break Higher

2026-05-14

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2026-05-14

The US dollar is trading quietly against the major currencies. The euro is holding above $1.17 and sterling is holding above $1.35, but the market does not appear done probing these support areas.  The greenback has also traded as close to JPY158 as possible without going over. This is where the Bank of Japan may … Continue...

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The Euro and Sterling are Threatening to Break Lower, while a Record Current Account Surplus Does not Prevent the Yen from Challenging Intervention Levels

2026-05-13

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2026-05-13

The lack of progress in re-opening the Strait of Hormuz has not prevented oil prices from stabilizing or risk-appetites improving today. Equities and bonds are trading with a firmer bias. The Trump-Xi meeting tomorrow is key talking point today. Ahead of it, the PBOC set the dollar’s reference rate at a new three-year low. US …

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Ceasefire is on “Life Support”: Saps Risk Appetites, Buoys the Greenback

2026-05-12

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2026-05-12

The uncertainty about the US-Iran fragile ceasefire, which President Trump has said is on “life support” is weighing on risk-taking appetites today. Brent and WTI are up over $3 and bonds and stocks have been sold. The US dollar is firmer against the G10 currencies but the Norwegian krone. Most emerging market currencies are lower. …

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Monday Blues: US Negotiating Tactic or Ceasefire may End

2026-05-11

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2026-05-11

News that the US rejected Iran’s counter-proposal is set the tone for today’s session. The dollar is mostly firmer, though the Canadian dollar and Norwegian krone are slightly firmer. Equities are mostly lower, yields, higher, alongside oil. Appreciating the seeming reluctance of the US to renew “kinetic” operations, the North American market may view the …

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Week Ahead: Trump-Xi and US-China CPI

2026-05-09

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2026-05-09

There were several developments to note last week, but arguably the most important was that investors are optimistic that the Middle East war is winding down despite some violations of the ceasefire. June WTI fell by 7% to around $95 a barrel, after rising by more than 22% in the previous two weeks. July Brent … Continue reading »

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US Jobs on Tap after Court Ruled Against Section 122 Tariffs and Conflict in the Middle East

2026-05-08

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2026-05-08

After recovering in the North American afternoon for the second consecutive session yesterday, the dollar has been sold again in Asia and Europe today. The market has mostly shrugged off news of new hostilities in the Middle East. As is often the case, the ceasefire has been frayed but appears to remain intact. Ostensibly, it …

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The Yuan’s Quiet Rise and Next Week’s Summit

2026-05-07

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2026-05-07

The offshore yuan appreciated nearly 5% against the dollar last year. The onshore yuan gained about 4.25%.  This year has picked up were 2025 left off.  Through yesterday, the offshore yuan has added roughly 2.4% this year, the onshore unit 2.6%. That puts it second among emerging market currencies in the region, trailing only the …

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USD Remains Soft, Norway Hiked, Mexico to Cut, and UK Votes

2026-05-07

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2026-05-07

Hopes that the war on Iran is nearly over and that the Strait of Hormuz will open soon and ease the supply shock that has rippled across the global markets continues to underpin risk appetites today. The AI boom and the infrastructure and defense spending in Europe are also contributing. The dollar is mostly softer, …

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TACO Delivered a Day after Cinco De Mayo

2026-05-06

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2026-05-06

There is one overarching fundamental development today that is driving the risk-on in the capital markets and weighing on the dollar. President Trump announced the US was suspending its new escort service in the Strait of Hormuz. Ostensibly at the request of Pakistan and other countries, the decision was to give negotiators more time. Front-month …

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US Dollar Mostly Softer, Gilts Play Catch-up, and the RBA Delivered Third Hike and Signals a Pause

2026-05-05

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2026-05-05

The US dollar is slightly lower against the G10 currencies but the Japanese yen as the North American session gets under way. Chinese and Japanese markets remain on holiday. Outside the Reserve Bank of Australia’s third rate hike of the year, the news stream is quiet. Contrary to claims otherwise, the Strait of Hormuz remains …

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US-Iran Ceasefire at Risk: Oil Pulls Rates Higher

2026-05-04

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2026-05-04

The US dollar recovered in late turnover ahead of the weekend and has extended its recovery today in holiday-thin trading. Japan, China, and UK markets are closed. The ceasefire in the US-Iran war looks fragile as Washington says it will begin escorting ships out of the Strait of Hormuz and Tehran threatens to attack the …

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Week Ahead: RBA Hike, UK Local Elections, and US Employment Report

2026-05-02

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2026-05-02

Three developments stand out from last week. First, all five G10 central banks that met delivered in some form of hawkish holds. The Bank of Japan was the least convincing and the swap market barely changed the extent of the anticipated tightening this year. The year-end projection rose by about 22 bp in Canada, 19 …

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May Day: Market Looks for US Leadership

2026-05-01

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2026-05-01

In holiday-thinned markets, the dollar is mostly softer as North American leadership is awaited.  In light of yesterday’s surge in the yen, and contrary to our expectation, it does appear that Japanese officials materially intervened yesterday. The intervention may have been for around $34.5 bln (~JPY5.4 trillion), which if accurate, would be larger than the …

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The Yen Recovers on Verbal Intervention

2026-04-30

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2026-04-30

The North American market understood yesterday’s Fed statement and the three dissents in favor of a neutral bias as a hawkish hold and rallied the dollar in response. Follow-through selling today has been minimal and the greenback is sporting a softer profile. The strongest currency today is the Japanese yen, which had fallen to its …

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Euro and ECB

2026-04-29

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2026-04-29

The euro' fell nearly 1.65% in Q1, only to claw back about 1.25% in April. At one level, that looks like noise within a broader range. At another, it reflects a market that has been repeatedly and abruptly forced to reprice the policy outlook in response to shifting geopolitical and macroeconomic crosscurrents.The ECB meets tomorrow, … Continue...

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Oil Prices Advance Ahead of What Will likely be Powell’s Last FOMC Meeting (as Chair)

2026-04-29

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2026-04-29

There are two dominant issues today. First, the ceasefire in the Middle East continues, but the blockade of Iran is an act of war, and the Strait of Hormuz remains blocked even if there are some reports that a few ships have managed to transit it. July Brent is at new contract highs and June … Continue reading...

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Three Dissents in Favor of a Rate Hike Fail to Support the Yen

2026-04-28

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2026-04-28

The markets seem nervous. The dollar is higher against all the G10 currencies and most emerging market currencies. June WTI, which was at $82.60 on April 17, is now pushing against $100. July Brent, which was at $86.50, is now approaching $105. Both are up for the sixth session of the past seven. Equities and … Continue...

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New Iranian Proposal Helps Bolster Risk Appetites

2026-04-27

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2026-04-27

The breakdown of talks between the US and Iran initially warned of a risk-off session, but a new Iranian proposal appears to have revived the hopes of a resolution. The US dollar is trading softer and equities in Asia Pacific and Europe rose while bond yields were under pressure. The front month crude oil contracts …

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