Category Archive: 4.) Marc to Market

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FX Daily, March 5: The Capital Markets YoYo Continues

2020-03-05

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2020-03-05

Overview: The 4.2% rally in the S&P 500 yesterday helped lift Asia Pacific markets earlier today, and the five basis point backing up of the US 10-year yield pushed regional yields higher. However, the coattails proved short, and Europe's Dow Jones Stoxx 600 is snapping a three-day advance and is off about 1.3% in late morning turnover to give back yesterday's gains.

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FX Daily, March 4: Equities Trade Higher, While Yields Continue to Fall

2020-03-04

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2020-03-04

Overview:  The G7 delivered up a nothing burger than was shortly followed by a 50 bp Fed cut.  The equity market seemed to enjoy it briefly and extended Monday's dramatic gains, before falling out of bed.  The S&P 500 lost about 2.2%, while the Dow Industrial slumped 3%, but shortly after the markets closed, equities began recovering, and the recovery carried over to the Asia Pacific region and Europe.

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March Monthly

2020-03-03

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2020-03-03

The new coronavirus that originated in China, apparently first detected in December, emerged on the world's stage in January and continues to dominate the investment climate. There are two critical questions for investors and businesses whose answers will likely be clearer in the first part of March. First, will Covid-19 be contained for the most part by the end of Q1? 

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FX Daily, March 2: Central Banks’ Words of Assurance have Short Life

2020-03-02

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2020-03-02

Overview: Comments beginning with Powell before the weekend, and BOJ and BOE earlier today promising support have saw equity markets briefly stabilize after last week's dramatic moves. The G7 will hold a teleconference this week, but speculation of a coordinated rate move does not seem particularly likely. Most of the large stock markets in the Asia Pacific region rallied, led by a 3%+ advance in China.

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FX Daily, February 28: Fallout Accelerates

2020-02-28

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2020-02-28

Overview: The dramatic response by investors to Covid-19 continues unabated and worse. The slide is accelerating. The S&P 500 posted a 4.4% loss yesterday, its worst session since 2011, and the sell-off is continuing. Many markets in Asia Pacific, including Japan, China, Korea, Australia, India, Singapore, and Thailand, fell by more than 3%.

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FX Daily, February 27: The Rot Continues but Somewhat Less Dollar Friendly

2020-02-27

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2020-02-27

A new phase of the Covid-19 is at hand. Yesterday was the first time that the number of new cases in the world surpassed the number of new cases China acknowledged. This confirms what we have known, namely that the battle for containing it in China has been lost.

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FX Daily, February 26: Dramatic Investor Adjustment Continues

2020-02-26

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2020-02-26

Overview: The warning by the US Center for Disease Control and Prevention that Americans should prepare for an outbreak of Covid-19 sent the S&P 500 tumbling to an 11-week low and the 10-year Treasury yield to a record low near 1.30%. The volatility of the S&P (VIX) jumped to its highest level since 2018. The sell-off in global equities continues unabated.

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FX Daily, February 25: Capital Markets Remain Fragile after Yesterday’s Bloodletting

2020-02-25

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2020-02-25

Overview: Yesterday's bloodletting in global equities has calmed, but investors remain on edge. Despite all the concerns that the markets were under-appreciating the implications of the new coronavirus, there is a sense that yesterday's moves were in excess. Japanese markets, which were closed on Monday, played catch-up today, and the Nikkei shed 3.3%.

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FX Daily, February 24: Stocks Slammed and Yields Drop as Virus Containment Fails

2020-02-24

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2020-02-24

Overview: The ring of containment of Covid-19 has grown from China. The new frontline is Japan, South Korea, Italy, and Iran. A lockdown of around 50k people near Milan and Austria blocking trains from Italy is scaring investors. Asian markets fell, but South Korea bore the brunt with a nearly 4% decline. The national holiday in Japan spared local equities.

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FX Weekly Preview: Sources of Imbalance and the Pushback Against New Divergence

2020-02-24

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2020-02-24

The US dollar's surge alongside gold has eclipsed the equity market rally as the key development in the capital markets. Even the traditional seemingly safe-haven yen was no match for the greenback.  The dollar appeared to have been rolling over in Q4 19, as the sentiment surveys in Europe improved, Japanese officials seemingly thought the economy could withstand a sales tax increase, and data suggested the Chinese economy was gaining some...

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FX Daily, February 21: Covid-19 Contagion Outside China Keeps Investors on the Defensive

2020-02-21

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2020-02-21

Overview:  The spread of Covid-19 outside of China and early signs of the economic consequences again emerged to weigh on investor sentiment.  Poor Japanese and Australian preliminary February PMI reports and some trade indications from South Korea saw most Asia Pacific equities sell-off.  China was an exception.  The small gain (0.3%), lifted the Shanghai Composite 4.2% on the week.

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FX Daily, February 20: Covid-19 Hits Yen and Korean Won

2020-02-20

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2020-02-20

The increase of Covid-19 cases in South Korea and Japan, coupled with China's changing reverting back to its previous methodology of calculation, dropping clinically-diagnosed cases have again weakened risk appetites and sent the dollar broadly higher. Fears of a Japanese recession are sapping the yen's role as a safe haven, and this helps explain why Japanese equities did react as positively to the weaker yen than is often the case.

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FX Daily, February 18: Apple’s Warning Weighs on Sentiment

2020-02-18

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2020-02-18

Overview: Apple's warning that it will miss Q1 revenue due to the knock-on effects of the coronavirus seemed to be a modest wake-up call to investors, who, judging from the equity market, were looking beyond. Equities have fallen, and bonds have rallied. Japan, Hong Kong, and South Korean stocks fell by more than 1%, and only China and Indonesia were able to post gains.

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FX Daily, February 17: Dismal Q4 Japanese GDP Fails to Spur Yen Movement

2020-02-17

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2020-02-17

Overview: It is only a US holiday today, but the global capital markets are subdued. In the Asia-Pacific region, equities traded lower with China and Hong Kong, the main advancers. The MSCI Asia Pacific Index has fallen in only two weeks since the end of last November, and that was during the last two weeks of January. Europe's Dow Jones Stoxx 600 slipped in the previous two sessions but is recouping the losses fully today.

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FX Daily, February 14: Investors Continue to Look Past the Coronavirus

2020-02-14

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2020-02-14

Overview: The capital markets are heading into the weekend, still trying to look past the coronavirus despite the new cases in Hubei. Tokyo was a notable exception in the Asia Pacific region, as the other major equity markets, like in Hong Kong, China, Taiwan, South Korea, and Australia, advanced. The MSCI Asia Pacific Index rose for the second week.

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FX Daily, February 13: Surprise? China Undercounts Afflictions and Fatalities, Curbs Risk Taking

2020-02-13

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2020-02-13

Overview: There is one overriding driver today, and that is the incorporation of CAT scan diagnoses of the virus in Hubei, ground-zero. This follows the arrival of WHO officials into China a couple days ago. Not only have the cases jumped, but so did the number of deaths. It plays on fears that China's figures are not reliable. But it is not just China.

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FX Daily, February 12: The Greenback Slips in Subdued Activity

2020-02-12

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2020-02-12

Investors appear to be increasingly looking past the latest coronavirus from China as new afflictions slow. Despite the soggy close of US equities yesterday, Asia Pacific bourses are nearly all higher, led by more than 1% gains in Singapore and Thailand. The Dow Jones Stoxx 600 is at new record highs, led by consumer discretionary and materials sectors.

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FX Daily, February 11: New Calm in the Capital Markets Continues, Powell Moves to Center Stage

2020-02-11

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2020-02-11

Overview: Investors are taking solace from reports indicating that the increase in the new coronavirus at ground zero (Hubei) is slowing. After the S&P 500 reversed early losses yesterday to close at new record highs helped keep the bullish sentiment intact. Benchmarks in Hong Kong, South Korea, Australia, and China rose for the sixth session.

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FX Daily, February 10: Quiet Start to the New Week in which Politics may Dominate

2020-02-10

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2020-02-10

Overview: The global capital markets have begun the new week on a cautious tone as investors seek to assess the latest news on the new coronavirus. Nearly all the markets in Asia fell but China. European bourses are lower as well, with the Dow Jones Stoxx 600 off about 0.3%. US shares are soft but little changed.

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