Category Archive: 4.) Marc to Market

Macro and Prices: Sentiment Swings Between Inflation and Recession

(On vacation for the rest of the month.  Going to Portugal.  Commentary will resume on June 1.   Good luck to us all.) The market is a fickle mistress. The major central banks were judged to be behind the inflation curve.

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Dollar and Yen Surge

Overview: Global equities are bleeding lower. Several large markets in the Asia Pacific region, including Hong Kong, Taiwan, and India are off more than 2%. Japan and Australian bourses fell by more than 1.5%.

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No Rest for the Weary

Overview: Risk appetites are improving on the margin. Asia Pacific stocks still fell after the sharp losses on Wall Street on Monday. Still, China, Taiwan and Indian equities traded higher. Europe's Stoxx 600 is snapping a four-day 6.5%+ slide and is up around 1.2% in late European morning turnover.

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The Week Ahead: US CPI and PPI Set to Soften

The Fed's 50 bp rate hike is behind us.  Another 50 bp hike is expected next month. The April employment report will do little to calm the anxiety about the "too tight" labor market. 

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Fed Day

Overview: The markets are mostly treading water ahead of the FOMC decision later today. Tech stocks tumbled in Hong Kong and the Hang Seng fell a little more than 1%, while India was the worst performer in the region falling over 2% following an unexpected and intra-meeting hike by the Reserve Bank of India.

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RBA Surprises with a 25 bp Hike

Overview: The large bourses in Asia Pacific except Hong Kong eased.  Japan and China's mainland markets are closed for the holiday.  Europe's Stoxx 600 is up about 0.6%.  It gapped lower yesterday and has not entered the gap today.  US futures are a little softer. 

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The Euro Continues to Stuggle to Sustain Even Modest Upticks, but Specs Still Long in the Futures

Overview: The US dollar begins the new week on a firm note ahead of the mid-week conclusion of the FOMC meeting.  Many centers are closed for the May Day holiday, making for thinner market conditions.  Equities are mostly lower in the markets that traded today.  This includes Japan, South Korea, Australia, and India in the Asia Pacific. 

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May 2022 Monthly

The general contours of the business and investment climate are being shaped by three forces.  First, Russia's invasion of Ukraine and the sanctions boost price pressures and slow growth.

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Did China’s Politburo Throw Markets a Lifeline?

Overview: Speculation that a midday statement by China's Politburo signals new efforts to support the economy ahead of  next week's holiday appears to have stirred the animal spirits. 

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China’s Covid Sends Commodities Lower and helps the Dollar Extend Gains

Overview:  Fears that the Chinese lockdowns to fight Covid, which have extended for four weeks in Shanghai, are not working, and may be extended to Beijing has whacked equity markets, arrested the increase in bond yields, and lifted the dollar. 

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Taking A Deep Dive Into Forex & World Currencies With Marc Chandler

Economist Danielle DiMartino Booth sits down with Marc Chandler. About the guest: Marc Chandler is a foreign exchange market analyst, writer, speaker, and professor. On August 19, 2009, Bloomberg L.P. published Chandler's first book, Making Sense of the Dollar. Marc has been covering the global capital markets for more than 30 years, including stints as the global head of currency strategy for both HSBC and Brown Brothers Harriman. Chandler...

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The Yen Bounces after 13-Day Slide and BOJ Defends Yield Cap

Overview: The record-long yen slide has stalled just shy of JPY129.50, even though the Bank of Japan defended its Yield-Curve Control cap on the 10-year bond and will continue to do so for the next four sessions. The greenback fell to almost JPY128 before steadying.  China again defied expectations for lower rates (loan prime rate), the yuan's sell-off accelerated and slide to its lowest level since last October.

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Yen Blues

Benchmark 10-year bonds yields in the US and Europe are at new highs for the year.  The US yield is approaching 2.90%, while European rates are mostly 5-8 bp higher.  The 10-year UK Gilt yield is up nine basis points to push near 1.98%. The higher yields are seeing the yen's losing streak extend, and the greenback has jumped 1% to around JPY128.45  The dollar is trading lower against the other major currencies but the Swiss franc.

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Greenback Starts New Week on Firm Note

Overview: With many financial centers, especially in Europe, closed for the long holiday weekend, risk-appetites remain in check.  Most Asia Pacific markets fell, and poor earnings from Infosys and Tata Consultancy, saw India pace the decline with a 2% drop.  US futures are also trading with a heavier bias.  Interest rates remain firm.  The US 2- and 10-year yields are up a couple of basis points to 2.47% and 2.85% respectively.  China's GDP...

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Rising US Rates Sends the Yen Lower, but 50 bp Hikes Didn’t Deter Kiwi and Loonie Selling

The dollar rose against the major currencies last week, but the British pound, which eked out a small gain in the holiday-shortened week.  The weakest was the Japanese yen, where rising US yields exerts an irresistible tug lifting the dollar to new 20-year highs. 

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Central Banks on a Preset Course Reduces Significance of High-Frequency Data

Arguably the most important data next week is the flash PMI.   It is not available for all countries, but for those generally large G10 economies, the preliminary estimate is often sufficiently close to the final reading to steal its thunder.

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PBOC Trim Reserve Requirements: Delilvers Wet Noodle after Earlier Disappointment

After posting the daily analysis, the PBOC announced a 25 bp cut in required reserves. This is said to free up around CNY530 bln or around $83 bln. It may help explain the failure to cut the benchmark Medium-Term Lending Facility. Some rural banks may see a 50 bp cut in reserve requirements.

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Good Friday

Overview:  Most centers are closed for the holidays today.  The Asia Pacific equity markets were open and moved lower following the losses on Wall Street yesterday.  The weakness of the yen failed to underpin Japanese shares.

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FED Tightening, Commodities Prices and Emerging Markets Breakdown w/ Marc Chandler.

In this video with Marc Chandler we talked about the macro-economic outlook for the coming moths. We started out by adressing the US enemployement report then we talked about the FED policy of raising rates. Later we talked about the effects of the conflict on economies and commodities prices, expecially oil and natural gas. Later we talked about how these commodities prices are having an influence in emerging markets. In the end we talked about...

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Short Covering in the US Treasury Market Extends the Yield Pullback

Overview: What appears to be a powerful short-covering rally in the US debt market has helped steady equities and weighed on the dollar.  Singapore and South Korea joined New Zealand and Canada in tightening monetary policy.  Attention turns to the ECB now on the eve of a long-holiday weekend for many members.  The tech-sector led the US equity recovery yesterday, snapping a three-day decline.  Most of the major markets in Asia Pacific advanced but...

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