Category Archive: 4.) Marc to Market

Filter archive by: Show All Show only Articles Show only Videos

US Dollar Extends Losses after North America Faded Yesterday’s Tariff-Threat Induced Gains

2025-01-22

by

2025-01-22

Overview: The US tariff threat was extended to China and the EU yesterday but after the North American market shrugged it off yesterday, for the most part, the market seemed to take it in stride. It is too early to say the market is becoming immune to the rhetoric. Still, the dollar is mostly softer today. Ironically, despite high confidence of a BOJ rate hike on Friday, the yen is the only G10 currency is lower on the day as the North American...

Read More »

Tariff Tuesday

2025-01-21

by

2025-01-21

Overview: The little emphasis on tariffs initially yesterday saw the US dollar pullback, the renewed threat of 25% tariffs on Canada and Mexico as of February 1 roiled the foreign exchange market and the dollar has come back bid. The Canadian dollar, among the G10, and the Mexican peso, among emerging market currencies have been the hardest hit, but the greenback is broadly higher. All the G10 currencies, but the yen and Swiss franc are off at...

Read More »

Week Ahead: Book-Ended by Trump’s Inauguration and the BOJ Rate Decision

2025-01-18

by

2025-01-18

There were four important macro developments to note in recent days. First, the recent string of US economic data was firmer than expected and GDP looks to have expanded close to 3% in Q4. With the help of guidance by Federal Reserve Waller, who is thought to be a possible successor to Chair Powell, played up the possibility of a cut in H1, and the market implemented the guidance and has next cut nearly priced in for the June FOMC meeting. Second,...

Read More »

Chinese Economy Grew 5% in 2024 (if You Believe it), UK Retail Sales Disappoint, and “Day One” Looms

2025-01-17

by

2025-01-17

Overview: The US dollar is firmer against most of the G10 currencies, but the tone is one of consolidation. Trump's inauguration on Monday, and the US markets are closed for the Martin Luther King holiday. Investors, businesses, and foreign countries have been warned of action on day one. Meanwhile, the yen is paring yesterday's gains, though the market anticipates a BOJ rate hike at the end of next week. The UK's retail sales cap a string of soft...

Read More »

Week Ahead: Fed to Cut, but Should it? BOJ and BOE to Stand Pat, but Should They?

2024-12-14

by

2024-12-14

(Happy Holidays. Daily Commentary will resume on January 6.  January monthly will post on January 4) The Swiss National Bank and the Bank of Canada delivered 50 bp rate cuts last week, and the European central bank cut by a quarter-point. The monetary easing cycle looks set to carry into next year. The Reserve Bank of Australia remains on hold and a stronger than expected employment report dampened speculation of a cut in Q1 25. The US CPI was in...

Read More »

Japan’s Tankan was Uninspiring and UK Disappoints with Contracting Economy in October

2024-12-13

by

2024-12-13

Overview: The US dollar is mixed against the G10 and emerging market currencies to finish out the week. Among the G10, sterling and the yen are the heaviest. Japan's Tankan survey was unimpressive and does nothing to reanimate speculation of a BOJ rate hike next week. Sterling has been dragged down by unexpected news that the economy contracted in October for the second straight month. The euro is being aided by the unwinding of cross positions...

Read More »

SNB Slashes Policy Rate in Half

2024-12-12

by

2024-12-12

Overview:  The US dollar is mostly softer today, but the tone is mostly one of consolidation. The Swiss National Bank surprised with a 50 bp cut and the franc is the only G10 currency that has not edged up against the greenback today. Australia reported a stronger than expected employment report. This boosted Australian yields and the Aussie, which is the strongest of the G10 currencies. Shortly, the ECB is expected to announce a quarter-point rate...

Read More »

Greenback Bid Ahead of CPI

2024-12-11

by

2024-12-11

Overview: The dollar is on fire. Ahead of today's US November CPI and tomorrow's anticipated rate cuts by the European Central Bank and the Swiss National Bank, the greenback is rising against all G10 currencies and nearly all emerging market currencies (but the Hong Kong dollar and the Indian rupee, which slipped to a record-low earlier today). There is a press report claiming that Beijing is considering allowing the yuan to fall further but it is...

Read More »

Dovish Hold Sends the Aussie Lower

2024-12-10

by

2024-12-10

Overview: The US dollar is little changed against most of the G10 currencies today. The antipodean currencies are the main exception. A modest change in tone from the Reserve Bank of Australia, boosting the chances of a rate cut early next year sent the Australian dollar back toward yesterday's lows, and the New Zealand dollar fell in sympathy. Most of the G10 currencies sporting softer profiles within the consolidative price action. The greenback...

Read More »

US Dollar is Offered and China’s Politburo Promises more Monetary and Fiscal Support

2024-12-09

by

2024-12-09

The dollar is offered. Neither the 227k rise in nonfarm payrolls, nor the above 3% Q4 growth that the Atlanta Fed sees the economy tracking, or the uptick in November CPI expected to be reported on Wednesday has been sufficient to dampen speculation of a rate cut next week.

Read More »

Week Ahead: 4 G10 Central Banks Meet, Three to Cut, Brazil to Hike 75 bp and US CPI may hold Key to FOMC

2024-12-07

by

2024-12-07

The US dollar advanced against all the G10 currencies last week but the Swiss franc but turned in a most mixed performance against emerging market currencies. The US 10-year yield fell for the third consecutive week and near 4.16%, it is around a dozen basis points below where it settled the night before the US election. The two-year yield fell for the second consecutive week and settled near 4.10% is about half a dozen basis points below the...

Read More »

Will a Solid US Jobs Report Dampen Expectation for a Fed Cut This Month?

2024-12-06

by

2024-12-06

Overview: There are two broad developments in the G10 currencies ahead of the US jobs report. The euro, Swiss franc, sterling, Swedish krona, and the Canadian dollar are in tight ranges with a heavier bias. The others are off a 0.3%-0.7%. There have been various distortions, like storms and industrial action, which exaggerated the weakness of the US labor market, which does seem to be slowing but gradually. Today's report should show a rebound, and...

Read More »

Fall of French Government Does Not Roil the Markets and a BOJ Dove did not Rule out Rate Hike this Month

2024-12-05

by

2024-12-05

Overview: The US dollar is mostly softer today. The only G10 currency that has not gained on it today is the Swedish krona, which is nursing minor losses. Still, the tone is one of consolidation and this may persist through the North American session, ahead of tomorrow US employment report. The median forecast in Bloomberg's survey has crept up to 215k. Most emerging market currencies have also gained on  greenback, but the South Korean won. The...

Read More »

Busy Wednesday: French Confidence Vote, Fed’s Powell Speaks, ADP Jobs Estimate, and Beige Book

2024-12-04

by

2024-12-04

Overview:  The dollar is mixed on what will start critical second half of the week. France holds its confidence vote in a few hours. Fed Chair speaks at a moderated discussion at the New York Times around 1:40 ET. The US data focus shifts to the labor market with the ADP estimate today and the nonfarm payroll report on Friday. The head of the main opposition party in Japan stepped down ostensibly until March due to a personal scandal and this has...

Read More »

US-China Exchange Export Restrictions, Yuan is Sold to New Lows for the Year, while the Greenback Extends Waller’s Inspired Losses

2024-12-03

by

2024-12-03

Overview: The US dollar has extended the losses scored late yesterday when Federal Reserve Governor Waller indicated he was still leaning toward a December rate cut. The odds of a rate cut rose to around 76% from about 66% at the end of last week. The odds are slightly lower today, around 72%. A solid jobs report on Friday and another uptick in CPI may change some minds. The only G10 currency that is weaker today is the Japanese yen, and it is off...

Read More »

French Government on Precipice, Presses Euro Lower

2024-12-02

by

2024-12-02

Overview: The US dollar is beginning the new week and month on a firm note. It is rising against all the G10 currencies and nearly all the emerging market currencies. US-President-elect Trump's threat to BRICS if they abandon the dollar is symbolic than substantive, as we have argued, despite the occasional claim to the contrary, a BRICS currency is not realistic, and the China has little interest in fostering another competitor to the yuan. Still,...

Read More »

December 2024 Monthly

2024-11-30

by

2024-11-30

The trends were already entrenched before the US election and continued through most of last month. The trend toward higher rates and higher equities stalled, while the dollar remained strong. Investors and business continue to wrestle with the implications of the Republican sweep in the US elections.There are two broad issues that are the source of uncertainty. The first is the broad tariff Trump has advocated on the campaign trail: 60% on China...

Read More »

Yen Jumps on Rate Hike Speculation

2024-11-27

by

2024-11-27

Overview: The US dollar has a softer profile today. All the G10 currencies are higher, led by 1%+ surge in the yen amid heightened speculation of a rate hike next month, while the US 10-year yield is near 4.25% today, the lowest since the election. Although the Reserve Bank of New Zealand allows for another half-point cut after delivering the second one this year earlier today, the New Zealand dollar has popped up amid sell the rumor buy the fact...

Read More »

Trump’s Tariff Talks Wobble Forex Market, Close Neighbors Suffer Most

2024-11-26

by

2024-11-26

Overview: As some market pundits were debating about a possible grand deal between the US and China. In exchange for a lighter tariff regime, Beijing would accept yuan appreciation. As far-fetched as such scenario may be, it was predicated on ideas that people like the Bessent, the Treasury Secretary-nominee, was pragmatic. Trump's comments hit in early Asia Pacific turnover specifically cited a 25% tariff on all product from Canada and Mexico and...

Read More »

Markets do Cartwheels in Response to Traditional Pick for US Treasury Secretary

2024-11-25

by

2024-11-25

Overview: The selection of Scott Bessent, the hedge fund manager as next US Treasury Secretary was greeted euphorically in the capital markets:  one of their own and, arguably, like many of new economics team could have been picked in any Republican administration. Risk appetites have been animated. Still, we suspect market positioning may have led to an exaggerated response. The dollar has been sold. Stocks have bought. The euro is leading the G10...

Read More »