Category Archive: 4.) Marc to Market

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

CSI 300 Drops 7%, Oil Steadies, and the US Dollar Remains Firm

2024-10-09

by

2024-10-09

Overview: We suspect the market overreacted to the US jobs data, which was tainted by the lowest "establishment" response in over two decades and seasonal adjustments were likely thrown off by Hurricane Helene and the 33k strike at Boeing. We think Fed officials, and more speak today, have confirmed that it was not the game changer than many market participants think, which was likely influenced by positioning. It did help facilitate the...

Read More »

Dollar-Bloc Currencies are Disappointed by the Lack of New Chinese Fiscal Stimulus

2024-10-08

by

2024-10-08

Overview: The US dollar is mixed but is mostly consolidating. The Australian dollar is a notable exception. The lack of new fiscal initiatives from China weighed on the Aussie, which is off for the fourth consecutive session. The other dollar-bloc currencies have also seen the recent losses extended. On the other hand, the Japanese yen and euro enjoy a firmer bias. After a dreadful drop in factory order, German industrial production surprised to...

Read More »

US Rates Extend Gains to Fray 4 percent

2024-10-07

by

2024-10-07

The stronger than expected US jobs report triggered a 20 bp jump in the US two-year yield and sent the greenback broadly higher. The market slashed the probability that the Fed would cut by 75 bp in Q4.

Read More »

Week Ahead: US CPI, China Returns, RBNZ to Cut 50 bp (?)

2024-10-05

by

2024-10-05

There were several developments last week that shape the investment climate. First, the September US employment report was stronger than expected and this reinforces the message from Fed Chair Powell. After initiating the easing cycle with 50 bp cut, the central bank is not in a rush and two quarter-point cuts in Q4 is most likely scenario. Once again, the market has converged to the Fed rather than the other way around. Second, the new Japanese...

Read More »

Today’s Employment Report is Important, but Fed Sees Another Before the Next FOMC Meeting

2024-10-04

by

2024-10-04

Overview:  The stronger than expected ISM services, which the market has seemed particularly sensitive this year lifted the two-year yield to about 3.71%, its highest level since the last employment report. The 10-year yield, which had been toying with 3.80%, finally settled above it for the first time in a month. The Dollar Index extended its advance to four sessions, matching the longest in six months. The focus is on the US employment report....

Read More »

Bailey Weighs on Sterling

2024-10-03

by

2024-10-03

Overview: The dollar enjoys a firmer tone today. The escalating conflict in the Middle East is keeping the market on edge. And then there is tomorrow's US employment report. Among the G10 currencies, sterling has been the hardest hit. It is off around 1% after Bank of England Governor Bailey seemed to signal that after pausing last month, the central bank may turn more aggressive here in Q4. Nearly all the emerging market currencies are...

Read More »

Patient BOJ Weighs on the Yen, Hong Kong Re-Opens with a Bang, Middle East War Underpins Crude, while the Dollar Consolidates

2024-10-02

by

2024-10-02

Overview:  The US dollar is mostly little changed today. Comments from the new Japanese government and BOJ Governor Ueda reinforce the sense driven by the softness in the September Tokyo CPI and larger-than-expected decline in August industrial output that there is no urgency for another rate hike. The yen is the weakest of the G10 currencies today. The Norwegian krone leads the major currencies higher after underperforming yesterday. Outside of...

Read More »

Powell’s Lack of Urgency Helps the Dollar Correct Higher

2024-10-01

by

2024-10-01

Overview:   Japan will go to polls a little ahead of the US. And the US election still looks too close to call. Canada may be forced into snap elections if the Bloc Quebecois abandon's negotiating with the minority Liberal government as it has threatened to do at the end of the month. The UK's new Labour government is putting together its first budget to be delivered at the end of the month. Among the first tasks of the new French prime minister is...

Read More »

Mortgage Relief Lifts China’s CSI 300 by more than 8% Ahead of the Golden Week Holiday

2024-09-30

by

2024-09-30

Overview: The US dollar is narrowly mixed on the last trading day of Q3 24. The Australian dollar, the G10 proxy for China, is leading the major currencies higher and reached its best level since February 2023 (~$0.6940). The yen and Swiss franc continue to trade heavily and are off 0.2%-0.25%. The euro firm and traded above $1.12 for the fifth time since late August but has failed to settle above there once. The soft inflation readings have...

Read More »

October 2024 Monthly

2024-09-28

by

2024-09-28

With the Federal Reserve's 50 bp rate cut, seven of the G10 central banks have begun an easing cycle that will extend, broaden, and may accelerate going forward. Australia and Norway will likely join the party next year, while some, like Canada and Sweden may increase the pace of its cuts in Q4.

Read More »

Yen Surges After New LDP Leader Picked, while the Greenback Consolidates

2024-09-27

by

2024-09-27

Overview:  Japan's LDP leadership selection has not been the dragged-out affair that many thought likely with a record nine candidate vying for the post. It turns out that the economy may have been less important than foreign affairs and the threat posed by China. Shigeru Ishiba is strong nationalist, who reports indicate own shares in Nippon Steel, whose bid for US steel has faced domestic opposition in the US on seemingly nationalist, rather than...

Read More »

China’s Politburo Validates and Extends Pivot while the US Dollar Sees Yesterday’s Gains Pared

2024-09-26

by

2024-09-26

Overview: After its recent losses were extended, the dollar reversed higher in North America yesterday. Technically, this looks to have ended the sharp drop over the last couple of weeks, but there has been no follow-through gains today and a consolidative tone emerged. G10 currencies are firmer today, led by the recovery in the Antipodeans. The Swiss National Bank delivered the expected 25 bp rate cut, but the Swiss franc is up about 0.25%....

Read More »

Run on the Dollar Stalls after the Market Boosted Odds of another 50 bp Fed Cut

2024-09-25

by

2024-09-25

Overview: Weak US consumer confidence, especially regarding the labor market boosted speculation of another half-point Fed cut in November when the central bank meets again. This weighed on the dollar. Sterling and the Australian dollar rose to new 2 1/2-year highs. The PBOC followed up yesterday's package with a 30 bp cut in the one-year Medium-Term Lending rate. After extending its losses earlier today, the dollar has steadied and turned higher...

Read More »

China Goes Big, and Market (Initially) Gives it the Benefit of the Doubt

2024-09-24

by

2024-09-24

Overview: News of China's multifaceted support measures have bolstered risk appetites today. The dollar is mostly softer and only the yen and Swiss franc among the G10 currencies have been unable to find traction against the greenback. Most emerging market currencies are also trading with a firmer bias. China's measures include measures to support the stock and housing markets. The seven-day repo rate was cut by 20 bp (to 1.50%) and reserve...

Read More »

European Currencies Start Week Softer, while the Dollar Bloc is Firm

2024-09-23

by

2024-09-23

European currencies are trading with a softer bias to begin the new week. Soft preliminary PMIs appeared to be the main culprit but Australia's PMI disappointed ahead of tomorrow central bank meeting, and the Australian dollar's small gain leads the G10 currencies today.

Read More »

Week Ahead: Did the Fed’s Rate Cut Signal a Near-Term Low in US Rates?

2024-09-21

by

2024-09-21

The Federal Reserve kicked off its easing cycle with a 50 bp rate cut on September 18. It is the seventh G10 central bank to cut rates this year. Japan is going in the other direction, albeit slowly. Norway's central bank says do not cut on a rate cut this year but be more confident of rate cuts next year. That leaves the Reserve Bank of Australia, which meets this week. It has been pushing against market speculation of a rate cut this year, and...

Read More »

Consolidation Featured, but the Yen and Mexican Peso are Under Pressure, While PBOC Fixed the Dollar Lower

2024-09-20

by

2024-09-20

Overview: The week is winding down and the US dollar is mostly consolidating against the G10 currencies. Two exceptions stand out. First, sterling is the only G10 currency higher on the day. It follows the BOE's cautious hold yesterday and stronger than expected retail sales today. The other exception is the Japanese yen, where the BOJ stood pat and did not seem to have the urgency after a move next month, even though the national CPI ticked up....

Read More »

Stocks Higher, Dollar Lower: Post-Fed

2024-09-19

by

2024-09-19

Overview: The Federal Reserve's 50 bp rate cut has made for a volatile 15 hours or so in the foreign exchange market. As North American traders return to their posts, the greenback is heavy. They will find that only the yen and Russian ruble are softer. Norway delivered a hawkish hold, and the krone leads the G10 currencies with more than a 1% gain. Australia's employment data was sufficiently strong that the Reserve Bank of Australia will likely...

Read More »

Atlanta Fed GDP Tracker Says US Economy is Expanding at 3% Clip for 3rd Quarter in Past 4, and the Fed is Going to Do What?

2024-09-18

by

2024-09-18

The dollar remains offered ahead of the FOMC meeting outcome. That no official has pushed back against the press story that some suspect was planted by the Fed Chair (will a reporter specifically ask him about it today?) during a quiet period should not be taken as evidence one way or the other. And many understand that it is not unprecedented.

Read More »

Risk of 50 bp cut by the Fed Tomorrow Keeps the Greenback on the Defensive

2024-09-17

by

2024-09-17

With heightened expectations of a 50 bp cut by the Federal Reserve tomorrow, the dollar has not gotten a reprieve and is softer against nearly all the currencies. Japan's long holiday weekend ended, and the greenback has held above JPY140 today.

Read More »