Category Archive: 4.) Marc to Market

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Week Ahead: FOMC in No Hurry to Cut Rates while BOE Easing set to Accelerate

2025-05-03

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2025-05-03

President Trump says there are trade talks with China. Beijing denies it. Around the time the US reports that the world's largest economy contracted slightly in Q1 (0.3% annualized), US Treasury Secretary Bessent said that the effective embargo was shutting down the China's economy. The week ended with China's Commerce Ministry statement that it was …

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China’s Feint Weighs on the Greenback Ahead of Today’s Employment Report

2025-05-02

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2025-05-02

Overview: Ideas that the US economy is not doing as poorly as many feared after the Q1 GDP contraction was dissected helped the dollar appear to confirm a bottoming pattern yesterday. However, indications that China is considering the US request for trade talks have bolstered risk-appetites today, ahead of the US jobs report and dragged …

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May Day: Dovish Hold by BOJ and Broadly Firmer Dollar

2025-05-01

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2025-05-01

Overview: The US dollar is mostly firmer in thin May Day turnover. The Japanese yen is the weakest of the G10 currencies following what is seen as a dovish hold by the Bank of Japan, which cut growth forecasts, shaved inflation projections, and delayed reaching its inflation target on a sustained basis. The market downgraded …

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Weak US Survey Data to Begin being Evident in Real Sector Reports

2025-04-30

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2025-04-30

Overview: The foreign exchange market is quiet. The dollar is mostly little changed against the G10 currencies, mostly in the ranges that have been carved in recent days. The dollar-bloc currencies are mostly flat to firmer. The others are softer, led by the yen's almost 0.5% loss and sterling's 0.35% decline. Among emerging market currencies, …

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US Dollar Comes Back a Little Firmer

2025-04-29

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2025-04-29

Overview: The US dollar has come back better bid today. It is firmer against all the G10 currencies. The proximate cause has been reports that as early as today, the 100th day of President Trump's second-term, he will announce another retreat pivot:  imported auto parts for vehicles made in the US may be waived or … Continue reading...

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Calm before the Storm?

2025-04-28

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2025-04-28

Overview: The US dollar is trading quietly in a mixed fashion, mostly confined to the ranges seen at the end of last week. This could prove to be a pivotal week. The weakness in the US survey data may become evident in the real sector data, with a dismal Q1 GDP reading that may show … Continue reading »

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Markets Remain Unsettled Despite the US Postponement of the Reciprocal Tariffs

2025-04-10

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2025-04-10

Overview: A couple of hours before the US announced a postponement in the reciprocal tariffs on everyone but China, President Trump sent social media message encouraging people to buy stocks. And the postponement sent US equities soaring, but it does not set right with many observers. In fact, the US hiked the tariff on China further, and the net result is that the average effective tariff in the US is now 24% rather than 27% as it would have been...

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Fragile Calm in the Capital Markets

2025-04-08

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2025-04-08

(traveling; no commentary tomorrow)Overview: The dramatic price action in throughout the capital markets after last week's US tariff announcements, China's retaliation, and yesterday's US threat of another 50% tariff on China has calmed today, in a nervous way. Indeed, the calm could be shattered by one comment or social media post by the US President. Japan pushed back against some of "facts" the US cited, like the tariff Japan puts on...

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Shades of Smoot-Hawley: Depression Feared

2025-04-07

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2025-04-07

Overview:  At the end of last week, there was much talk about Black Monday and today it is here. Various circuit breakers kicked in as stocks plummeted. The Nikkei 225 fell 7.8%, and while China's CSI 300 fell 7.05%, the index of mainland shares that trading in Hong Kong dropped 13.75%. The Hang Seng itself was down 13.2%. Europe's Stoxx 600 fell 5.1% before the weekend and is off another 5.8% today. US index futures settled on their lows before...

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The Week Ahead: Trade War and Price Action are More Important than US and China’s CPI

2025-04-05

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2025-04-05

April 2, what President Trump called, "Liberation Day" will indeed go down in history. The markets quaked. A trade war with China escalated as Beijing took strong retaliatory measures, with not only a sharp rise in its tariff on US imports but imposed (more) restrictions on rare earth exports. Canada and Mexico were spared the "reciprocal tariffs,” but both made clear declarations of intent to diversify their trade and economic...

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Friday: Tariffs, US Jobs, Powell, and Melting Equities

2025-04-04

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2025-04-04

Overview:  There appear to be two-forces at work that has helped the US dollar recover. First, as the market continues to debate whether the reciprocal tariffs are a negotiating ploy and in this tug-of-war of sorts, President Trump's declaration that he is open to "phenomenal offers" plays into that view. Still, the fact that Israel got rid of all of its tariffs on the US and still was hit with a 17% levy is notable. Second, there may be...

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The Day After

2025-04-03

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2025-04-03

Overview: Little would one know from looking at the US economic outperformance and the record-high household net worth, but the US President said that global trade has “looted, pillaged, raped, and plundered” the US economy. Rather than some sophisticated analysis to measure trade and non-trade barriers as the President Trump suggested, the so-called "kind reciprocity," appears to be a simple function of US imports as a percentage of the...

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Liberation Day from the Multilateral World Our Parents, Grandparents, and Great Grandparents Created

2025-04-02

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2025-04-02

Overview:   The trepidation over today's US tariff announcement has been underscored by reports that even as late as yesterday, a final decision had not been made. Given the complexity of different tariff schedule formulations, and the desire to implement the new regime immediately seem to favor a simply across the board levy or maybe two categories, a high one and low one. In terms of allocation of power, Treasury Secretary Bessent and his...

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Dollar Consolidates, Bonds Rally, Stocks Recover, and Gold Extends Gains Ahead of Tomorrow’s US Tariff Announcement

2025-04-01

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2025-04-01

Overview:  Ahead of tomorrow's US tariff announcement, which reports suggest the administration is still debating key elements, the US dollar is mostly consolidating inside yesterday's ranges. The news stream has been limited to the largely as expected Japanese Tankan survey, which did not appear to impact BOJ expectations and the unsurprising decision by the Reserve Bank of Australia to stand pat after initiating an easing cycle at its last...

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Equities and Rates: Look Out Below

2025-03-31

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2025-03-31

Overview:  The US dollar begins the new week mostly firmer. The dollar-bloc currencies and Scandis are the weakest. Sterling and the euro are little changed, while the continued drop in the US 10-year yield has helped lift the yen by nearly 0.5%. Emerging market currencies are mixed as well. A handful of Asian currencies, including the Chinese yuan, are higher. The Turkish lira is also firmer, after falling nearly 4% over the past two weeks....

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April 2025 Monthly

2025-03-29

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2025-03-29

The world is different. After a four-year restoration of the traditional globalist US elite, a majority of the American electorate seems to have rejected it. President Trump is indeed a transformational president, and his reversal of many traditional elements of US domestic and foreign policy are triggering dramatic action in other parts of the world. Many Americans and European had been critical of Germany's self-imposed fiscal strait jacket   In...

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Friday Surprises: Tokyo Inflation on the Upside, France and Spain on the Downside, Stronger UK Retail Sales

2025-03-28

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2025-03-28

Overview: The US dollar, which struggled yesterday, is trading higher against most currencies today. The Japanese yen an exception among the G10 currencies. The higher-than-expected March Tokyo CPI had little impact on BOJ expectations, the pullback in the US 10-year yield, around seven basis points from yesterday's high, has helped underpin the yen. The UK reported stronger than expected retail sales and its first trade surplus, excluding precious...

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Markets Hold Collective Breath as US Offensive Launched

2025-03-27

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2025-03-27

Overview:  Many participants were focused on next week's US "reciprocal tariffs" when yesterday, it announced a 25% tariff on imported cars, effective April 3. Fully assembled vehicles are the first target, but by May 3, major parts, such as engines, transmissions, powertrain components and electrical systems will be included. The tariffs on Mexico and Canada will be adjusted based on the share of domestic content. A White House official...

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Softer CPI Weighs on Sterling, Ahead of Budget Statement

2025-03-26

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2025-03-26

Overview:  Uncertainty over next week's US tariff announcement continues weigh on markets and undermines near-term conviction. The dollar is mostly consolidating against the G10 currencies. Sterling is the heaviest, off about 0.3% after a soft CPI report and ahead of the Spring Budget Statement. The dollar bloc and Norwegian krone are the strongest. Among emerging market currencies, the Mexican peso roughly 0.25% loss puts it at the bottom of the...

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FX Market Calm on the Surface, Angst Below

2025-03-25

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2025-03-25

Overview:  The US dollar is consolidating its recent gains against the G10 currencies in quiet and relatively uneventful turnover. There continue to be mixed signals about the US tariffs threatened for next week. President Trump himself said that auto tariffs were coming soon as in days, while suggesting that there may be "a lot" of carve-outs from the reciprocal tariffs. EU's trade representative Sefcovic is meeting with US Commerce...

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