Category Archive: 4.) Marc to Market

FX Daily, January 24: Coronavirus Hits Asia Hardest, Europe and the US Resilient

Overview: The new coronavirus in China has moved into the vacuum left by the US-China trade agreement and clear indications that the Bank of Japan, the European Central Bank, and the Federal Reserve are on hold as investors searched for new drivers. The World Health Organization refrained from calling it a public health emergency even though China has dramatically stepped up its efforts to contain the new virus.

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FX Daily, January 23: ECB’s Strategic Review and the Coronavirus Command Investors’ Attention

The spread of the coronavirus and the lockdown in the epicenter in China has again sapped the risk-taking appetite in the capital markets. Asia is bearing the brunt of the adjustment. Tomorrow starts China's week-long Lunar New Year celebration when markets will be closed, which may have also spurred today's drama that aw the Shanghai Composite tumbled 2.75%, bringing the week's loss to 3.2%, the most in five months.

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FX Daily, January 22: Fragile Stability in Capital Markets even as SARS Comparisons Grow

Overview: The S&P 500 lost less than 0.3% yesterday, even as the first case of the Wuhan Virus was found in the US. The relative subdued US reaction may have helped stabilize the capital markets today. Nearly all the major markets in the Asia Pacific regions rose, including more than a 1% gain in Hong Kong and South Korea. European shares are posting small gains near midday.

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FX Daily, January 21: New Respiratory Illness Saps Risk-Taking Appetites

The spread of a new respiratory illness in China has spurred a wave of profit-taking in equities and risk assets more generally. All of the markets in the Asia Pacific region tumbled, with Hong Kong hit the hardest (-2.8%) after posting a key reversal yesterday. The sell-off continued in Europe. The Dow Jones Stoxx 600 is off about 0.8% in late morning turnover, led by consumer discretionary, materials, and energy. 

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FX Daily, January 20: Stocks Stall while the Dollar Remains Bid

Overview: The new week is off to a quiet start as the US celebrates Martin Luther King's birthday, and investors look for a fresh focus. Hong Kong and Indian markets were suffered modest declines while most of the other large Asia Pacific markets edged higher. European stocks are trading a little lower, and the Dow Jones Stoxx 600 is threatening to end a four-session advance. Most benchmark bond yields around half a basis point in one direction or...

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FX Weekly Preview: Central Bank Meetings Featured

The US dominated the news stream at the start of 2020. The spasm in the US-Iran confrontation has quickly subsided. The much-heralded US-China Phase 1 trade deal has been signed. The US has completed the ratification process of the US Mexico Canada Free-Trade Agreement. The early signs from the economic entrails suggest the world’s largest economy continue to enjoy a record-long, even if not robust, expansion. 

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FX Daily, January 17: China and the UK Surprise in Opposite Directions

Overview:  Helped by new record highs in the US, global stocks are moving higher today. Nearly all the markets in the Asia Pacific region advanced and the seventh consecutive weekly rally is the longest in a couple of years. Europe's Dow Jones Stoxx 600 is at new record highs and appears set to take a four-day streak into next week. US shares are trading firmly.

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FX Daily, January 16: Markets Look for New Cues with US-China Trade Pact Signed

Overview: The global capital markets are calm today as investors await fresh trading incentives. New record highs in the US equity indices gave Asia Pacific stocks a lift, though China and Taiwan were notable exceptions. Europe's Dow Jones Stoxx 600 is firm new record highs set last week.  US equities are edging higher in Europe. Benchmark bond yields are little changed.

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FX Daily, January 15: Phase 1 Trade Deal Shifts Terrain of US-China Rivalry

News that US tariffs on China will remain until through at least the November US election and continued US attempts to stymie China (e.g., more curbs on Huawei under consideration and stepped up efforts to force it to cut subsidies to business) have taken some momentum from the push into risk assets. The MSCI Asia Pacific Index snapped a four-day advance today, with only Australian equities among the large regional markets able to sustain upticks. 

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FX Daily, January 14: China was a Currency Manipulator for a Few Months

Overview: The leaked US decision to lift the currency manipulator designation on China was the latest fodder fueling the new record highs in the S&P 500. The risk-taking appetite helped extend the rally in the MSCI Asia Pacific Index for the fourth consecutive session. Europe's Dow Jones Stoxx 600 is little changed and trying to snap a two-day decline.

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FX Daily, January 13: Dismal Data Undercuts Sterling and Boosts Chances of a Rate Cut

Overview: There are two big stories today. The first is the large scale protests in Iran after the government admits to accidentally shooting down the commercial airliner amid the fog of war. The market impact seems minimal but fueling speculation that this, coupled with the economic hardship related to the US embargo, could topple the regime. Second, the UK reported that the economy unexpectedly contracted in November.

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FX Weekly Preview: Back to Macro?

The US-China trade conflict and then US-Iran confrontation distracted investors from the macroeconomic drivers of the capital markets. It is not that there is really much closure with the exogenous issues, but they are in a less challenging place, at least on the surface. 

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FX Daily, January 10: Jobs Friday: Asymmetrical Risks?

Overview:  The first full week of 2020 is ending on a quiet note, pending the often volatile US jobs report.  New record highs US equities on the back of easing geopolitical anxiety is a reflection of greater risk appetite that is evident across the capital markets.  Asia Pacific equities mostly rose today, though Chinese shares and a few of the smaller markets saw small losses. 

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FX Daily, January 9: Animal Spirits Roar Back

Overview:  The S&P 500 recovered from a 10-day low to reach a new record high, which set the tone for the Asia Pacific and European markets today.   The MSCI Asia Pacific Index jumped by the most in a month with the Nikkei's 2% advance leading the way.  More broadly, the markets in Taiwan, South Korea, Hong Kong, India, and Thailand all rose more than 1%.

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FX Daily, January 8: Hopes of De-Escalation Help Markets Stabilize

The Iranian retaliatory missile strike on Iraqi-bases housing US forces initially sparked a dramatic risk-off response throughout the capital markets. The muted response by the US coupled with signals from Tehran that it had "concluded" its proportionate measures saw the markets retrace the initial reaction. It was too late for equities in the Asia Pacific region, and several markets (Japan, China, Korea, Malaysia, and Thailand) fell more than 1%.

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FX Daily, January 7: Geopolitical Angst Eases, Helps Equities and Underpins the Greenback

Overview: Without fresh escalation, investors cannot maintain a heightened sense of geopolitical anxiety.  The recovery of US shares yesterday set the tone for today's rebound in Asia and Europe. All the equity markets in the Asia Pacific region rallied today, led by a 1.6% rally in Japan and a nearly 1.4% advance in Australia, with the exception of Taiwan.

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FX Daily, January 6: Markets Struggling to Stabilize to Start the New Week

Overview: The global capital markets have yet to stabilize amid heightened geopolitical tension. Even though the US stock market finished last week off its lows, the sell-off continued in the Asia Pacific region. Japan's markets re-opened after an extended holiday, and the yen, at three-month highs, saw the Nikkei sell-off nearly 2%. Several markets in the region lost over 1%, including Taiwan, India, Thailand, and Indonesia. Europe's Dow Jones...

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FX Weekly Preview: High-Frequency Data may Underscore Four Thematic Points

Full liquidity returns to the markets gradually in the coming days, and the week ahead culminates with the US December employment report.  The highlights include the service and composite PMI readings,  and December eurozone and China's CPI.  The UK reports December PMIs,  November GDP, and industrial output figures.

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FX Daily, January 03: Geopolitics Saps Risk Appetite

Iran's Ayatollah Ali Khamenei has threatened "severe retaliation" for the US attacked that killed an important head of a force within the Islamic Revolutionary Guard. At the same time, reports indicate that North Korea's Kim Jong Un is no longer pledging to halt its nuclear weapons testing and has threatened to unveil a new weapon. Meanwhile, Turkish forces have reportedly entered Libya.

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FX Daily, January 02: Equities Start New Year with a Pop

Overview:  Equities have begun New Year like, well, last year, with most Asia Pacific markets advancing, led by more than 1% gains in China, Hong Kong, and Thailand.  Only South Korea and Indonesian markets fell.  In Europe, the Dow Jones Stoxx 600 is up almost 1% in late morning turnover.  US shares are trading higher as well, and the S&P 500 is up nearly 0.6%.

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