Category Archive: 4.) Marc to Market

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

RBNZ Delivers a Dovish Hike and UK Inflation Surprises to the Upside

2023-05-24

by

2023-05-24

Overview: Equities in the Asia Pacific region and Europe are being led lower by the sell-off in the US yesterday. All the large Asia Pacific markets fell with Hong Kong and mainland shares setting the pace. Europe's Stoxx 600 is off nearly 1.5%, which would be the largest loss in two months. Consumer discretionary, financials and real estate sectors are off nearly 2%. US equity futures have a softer bias. European 10-year yields are mostly 2-3 bp...

Read More »

Yen Recovers from New 2023 Low, while Sterling Sets a New Low for the Month

2023-05-23

by

2023-05-23

Overview:  The dollar is bid. Only the Japanese yen is holding its own against the greenback but only after it fell to new lows for the year. The Scandis and Antipodeans are the heaviest among the G10 currencies, while sterling has fallen to a new low for the month. The prospect of a rate hike tomorrow has not protected the New Zealand dollar much and it is off nearly 0.5%. Emerging market currencies are more mixed. Outside of the Russian rouble,...

Read More »

The Dollar Consolidates after Powell Sapped its Mojo

2023-05-22

by

2023-05-22

Overview:  Federal Reserve Chair Powell's offered a stronger case for a pause in the monetary tightening before the weekend and this sapped the dollar's mojo. The greenback is mostly consolidating through the European morning in quiet turnover. The JP Morgan Emerging Market Currency Index is trying to snap a four-day decline. The South African rand is recovering from its recent slide and is up nearly 1%. The South Korea won is benefitting from...

Read More »

Week Ahead: US Debt Ceiling Drama Continues and the Dollar’s Two-Week Rally Stalls

2023-05-20

by

2023-05-20

Mostly stronger than expected economic data, hawkish rhetoric by several Fed officials, some signs of progress on the perverse drama over the debt ceiling, and a solid week for bank shares helped the dollar extend its recent recovery. The greenback rose to new highs for the year against the Japanese yen and Chinese yuan. The euro took out April's low (~$1.0790) and sterling traded briefly below $1.24. The US two-year note yield takes a six-session...

Read More »

Key Chart Points Hold and the Dollar’s Rally Stalls Ahead of the Weekend

2023-05-19

by

2023-05-19

Overview: Hawkish comments from Fed officials and the first decline in continuing unemployment claims below 1.8 mln in two months boosted US rates and the odds of a June rate hike rose to about 37%. This represents a near tripling of the probability in the past week. It has been a trend with the odds rising in 9 of the past 11 sessions. The two-year note yield has risen for the past five sessions coming into today for a cumulative gain of about 35...

Read More »

Yen and Yuan Fall to New Lows for the Year

2023-05-18

by

2023-05-18

Overview: Some creeping optimism about the US debt ceiling, easing of pressure on bank shares, and a continued rise in US rates helped the dollar extend its recent recovery. Over the past two weeks or so, the US 2-year premium has risen 25-30 bp against Germany and nearly 25 bp against the UK. The 10-year US Treasury has risen from the lower end of its seven-month range (~3.30%) earlier this month to approach the upper end of the range that has...

Read More »

The Yen is Sold Despite Better than Expected Q1 GDP and the Greenback Pushes Above CNY7.0

2023-05-17

by

2023-05-17

Overview: Better than expected US core retail sales and manufacturing output sent US rates higher and helped lift the greenback during the North American session after a heavier tone in Asia and Europe. The US two-year note rose to almost 4.12% and the 10-year note yield increased to 3.57%. Both are the best levels in two weeks. The dollar traded firmer against most of the major currencies and the Dollar Index approached the one-month high set on...

Read More »

Biden to Go to G7 Summit with Debt Ceiling Unresolved

2023-05-16

by

2023-05-16

Overview:  The US debt ceiling talks resume at the White House today but a deal is unlikely to be announced. President Biden will attend the G7 summit in Hiroshima with the debt ceiling still looming. The dollar is mostly softer as last week's gains are pared. The Swiss franc and Japanese are the strongest in the G10. The Thai baht and South African rand, among the market's favorites yesterday are seeing those gains retraced. The JP Morgan Emerging...

Read More »

Markets Catch Breath as Politics Trumps Economics

2023-05-15

by

2023-05-15

Overview: The dollar is mostly consolidating last week's gains. The big news has been on the political front. Thailand's opposition parties dealt the military-led government a powerful blow. But in Turkey, Erdogan staved off a serious challenge and a run-off later this month looks likely, while his party maintained its parliamentary majority. Tensions over arms shipments to Russia have eased between the US and South Africa, giving the rand a boost....

Read More »

Week Ahead: Does the Dollar have Legs?

2023-05-13

by

2023-05-13

There are different ways to measure it, but the dollar just put in its best week of the year. The greenback rose against all the G10 currencies, and the Dollar Index rose by the most since last September. It also appreciated against most emerging market currencies, with the notable exceptions of a handful of Latam currencies. It seems to be an overdue technical correction. Few genuinely believe that the US will default given the ominous...

Read More »

Limited Follow-Through Dollar Buying After Yesterday’s Gains

2023-05-12

by

2023-05-12

Overview: The dollar sprang higher yesterday but follow-through buying today has been limited. The little more than 0.5% gain in the Dollar Index was among the largest since mid-March. And yet, the debt ceiling anxiety and weak US bank shares persist. Today's talks at the White House have been postponed until early next week. Both sides are incentivized to bring it to the brink to demonstrate to their constituencies that they got the best deal...

Read More »

Sterling is Not Immune to Greenback Gains ahead of the BOE

2023-05-11

by

2023-05-11

Overview: The US dollar has come back bid today. It is rising by 0.25%-0.50% against all the G10 currencies. The Canadian dollar is the most resilient today, which is often the case when the greenback is firm. The Australian dollar is off the most after reaching its strongest level since late February yesterday. Sterling is a middling performer today ahead of the anticipated Bank of England rate hike. The dollar is also firmer against most emerging...

Read More »

Narrow Ranges in FX: Calm before the Storm?

2023-05-10

by

2023-05-10

Overview: Equity markets are mostly weaker, and benchmark 10-year yields are a little softer. The foreign exchange market is subdued ahead of today’s US CPI. The large bourses in Asia Pacific region with the exception of India worked lower and Europe’s Stoxx 600 is off for the second consecutive session. US futures have a heavier bias. Yesterday the US bank share indices filled the gap created at the end of last week but recovered. Today’s price...

Read More »

Consolidative Session Marked by Weak Chinese Imports and White House Debt Ceiling Talks

2023-05-09

by

2023-05-09

Overview: The market sentiment remains fragile. Equities are mostly lower. Japan was a notable exception, and concerns about China's economy after a sharp decline in imports took mainland and Hong Kong listed companies sharply lower. Europe's Stoxx 600 is giving back yesterday's 0.35% gain plus more. Bank shares are off 0.65% after rallying 4.20% over the past two sessions. US equity futures are heavier. Benchmark 10-year yields are mostly a couple...

Read More »

The Greenback Continues to Struggle

2023-05-08

by

2023-05-08

Overview: There is a nervousness that hangs over the capital markets. Although US banks shares recovered at the end of last week, many continue to see the sector’s challenges as the harbinger of a dramatic reversal in the Fed’s stance. America’s debt ceiling looms large and could be a few weeks away. China led Asia Pacific bourses higher, and, ironically, its bank shares extended their rally. Japan, returning from last week’s holiday was notable...

Read More »

Week Ahead: Hawkish BOE, US and China CPI, but is the Fed Really Going to Cut Rates by 75-100 bp This Year?

2023-05-06

by

2023-05-06

The combination of the US bank stress, the approaching debt ceiling, and the Fed's opening the door to a pause in rates weighed on risk sentiment and dragged the greenback lower. KBW's indices for large and regional bank shares bled 7.4%-8.0% lower last week to cut through March's lows like a hot knife through butter. Still the price action was constructive ahead of the weekend. US Treasury Secretary Yellen warned that the X-date when the...

Read More »

The Greenback Remains Heavy Ahead of the Employment Report

2023-05-05

by

2023-05-05

Overview: The US dollar is weaker against all the G10 currencies today but the Swiss franc. The backdrop seems fragile even though a few regional bank shares have done better in after-hours trading and Apple's earnings were received well by the markets. Due to seasonal factors and other considerations, many are warning about a US jobs report, even though ADP's estimate surprised to the upside earlier this week. Equities were mixed in the Asia...

Read More »

The Euro Stalled Near Its Best Level since April 2022 Ahead of ECB’s Decision

2023-05-04

by

2023-05-04

Overview: Without making a commitment, the Federal Reserve opened the door to a pause in its tightening cycle and the market has concluded it is over. The dollar slumped to new lows for the move against sterling (and the Mexican peso), while euro stalled as it approached last week's high, which was the best level since April 2022. The dollar remains soft against most of the G10 currencies, today. The Norwegian krone is leading after the 25 bp hike...

Read More »

Fed Day

2023-05-03

by

2023-05-03

Overview: A sharper than expected decline in US job openings and weaker factory orders coupled with intensifying bank stress sent ripples through the capital markets. The large US bank index fell 4.5% yesterday, the most in six weeks, while the regional bank index fell nearly 5.5%, its biggest loss since March 13. Both indices took out the March lows. The US 10-year yield unwound Monday's increase and the two-year note yield fell back below 4.0%...

Read More »

RBA Surprises with a Quarter-Point Hike

2023-05-02

by

2023-05-02

Overview: A combination of a surprisingly strong prices paid component to the US manufacturing PMI, corporate supply, and US debt woes spurred an almost 15 bp spike in the US 10-year yield and 13 bp jump in the two-year yield. The rise in US rates appeared to lend the dollar support. The greenback's gains have been extended today, but a surprise hike by the Reserve Bank of Australia is seeing the Australian dollar (and New Zealand dollar) traded...

Read More »