Category Archive: 4.) Marc to Market

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Week Ahead: Supportive Dollar Technicals vs Possible Dovish Hold by FOMC and Slower Jobs Growth

2025-07-26

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2025-07-26

We had adopted a working hypothesis that the after recording lows in early July that the greenback was going to retrace the last leg down that began around June 23. That appeared to run its course around July 17. We anticipated last week's pullback. However, the price action warns that the dollar's upside correction may …

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The Dollar Recovers Ahead of the Weekend

2025-07-25

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2025-07-25

Overview: The greenback is firm as the week winds down. Next week could be one of the most eventful of the year, with FOMC meeting, US and eurozone Q2 GDP, US PCE deflator and jobs data, and the August 1 "reciprocal tariff" extension deadline. The recovery in US rates has seen the dollar rise toward … Continue reading »

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Chinese Yuan and Australian Dollar Reach New 2025 Highs

2025-07-24

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2025-07-24

Overview: With a US-Japanese deal in hand, and the prospects of an extended tariff truce between the US and China, many perceive some tail risks associated with the US foreign economic policy have diminished. This has encouraged the animal spirits and helped drive equity prices higher. The dollar is mixed. The uptick in Australia's PMI …

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Trade Deals Bolster Risk Appetites

2025-07-23

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2025-07-23

Overview: The US has struck a trade deal with Japan, Indonesia, and the Philippines and Treasury Secretary Bessent has suggested the August 12 end of the US-China tariff truce will likely be extended next week. The dollar bloc leads the G10 currencies higher amid some creeping optimism, while the euro is the laggard, off about …

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Tokyo Returns and Yen Stabilizes after Yesterday’s Jump

2025-07-22

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2025-07-22

Overview: The foreign exchange market is quiet. The greenback is narrowly mixed against the G10 currencies. Leaving aside thinner traded New Zealand dollar and Norwegian krone, the other currencies are mostly +/- 0.1%. Emerging market currencies are also mixed and mostly +/- 0.2%. The approaching August 1 expiration of the postponement of US "reciprocal tariffs" …

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Yen Jumps as Governing Coalition Loses Majority in Upper House

2025-07-21

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2025-07-21

Overview: The US dollar begins the new week with a softer bias, but it still needs to run the North American gauntlet, which has tended to be more constructive than other centers recently. As seemed likely, less than a year after losing its majority in the lower, the LDP and Komeito coalition lost its majority …

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Week Ahead: State of Dollar’s Correction to be Determined

2025-07-19

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2025-07-19

The US dollar rose against the G10 currencies and most emerging market currencies last week. But to the extent the upside correction this month has been spurred by a backing up of US rates, its recovery may be over or nearly so. The US two-year yield settled lower on the week and the 10-year yield … Continue reading...

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Waller may be Alone in Advocating July Rate Cut, but it Weighs on the Greenback

2025-07-18

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2025-07-18

Overview: The US dollar is trading softer against most G10 and emerging market currencies today. The dollar seemed to lose its bid late yesterday after Federal Reserve Governor Waller argued in favor a rate cut at this month's meeting, despite the TIC data that showed foreign investors bought more US securities in May than they …

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Trial Balloon to Fire Powell went over like a Lead Zeppelin

2025-07-17

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2025-07-17

Overview: A natural experiment of sorts unfolded yesterday. Heightened speculation, fanned in part by the White House itself, that after several threats, President Trump was going to fire Fed Chair Powell. Short-term rates fell but the curve steepened, the greenback sold off sharply, and stocks skidded lower. The main narrative is that seeing the carnage, …

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USD Steadies after Yesterday’s Surge, but Does it have Legs?

2025-07-16

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2025-07-16

Overview: The dollar has steadied today after yesterday's jump. Asia and Europe do not seem to be as enthusiastic about the dollar as North America seemed to be yesterday. President Trump indicated that sectoral tariffs on semiconductor chips and pharmaceuticals could be announced as early as August 1. He also said that there will be …

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Greenback Slips Ahead of June CPI

2025-07-15

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2025-07-15

Overview: The US dollar is trading somewhat heavier against the G10 currencies but the Scandis today, ahead of the US CPI report. Most emerging market currencies are also firmer. The last few CPI readings were softer than expected, but economists continue to look for firmer price pressures. Late yesterday, the US announced a 17% tariff …

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Market Recognizes US Tariff Threats as Negotiation Tactics and Sees Through New Front in Criticism of Powell

2025-07-14

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2025-07-14

Overview: The market has taken the US threat of 30% tariffs on the EU and Mexico in stride. Both currencies wobbled a little but are little changed as the North American session is about to start. Participants seem to recognize the threat as a tactic meant to increase the pressure to negotiate (i.e., make new …

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Week Ahead: US CPI and Import Prices may keep Fed’s Stand Pat Decision Unanimous amid Threats of a Higher Universal Tariff

2025-07-12

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2025-07-12

The dollar rose against most of the G10 currencies last week. The Australian dollar and Swedish krona were the exceptions. The Aussie was helped by the central bank's surprise decision not to cut rates. The krona may have been helped by stronger than expected June inflation, with the key measure jumping to 3.3% from 2.5%), …

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US Tariffs Unsettle the Markets while the UK’s May GDP Unexpectedly Contracted

2025-07-11

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2025-07-11

Overview: The US 35% tariff on Canada and President Trump's threat to have a 15%-20% universal tariff rather than 10% provides today's disruption. A tariff letter for the EU is awaited but seeing how the US treated Canada and Brazil (with whom the US has a trade surplus) warns of the risk to Europe. That …

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The Dollar’s Upside Correction Stalls

2025-07-10

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2025-07-10

Overview: The continued release of US tariff announcements shapes the near-term considerations. Of the surprises, the 50% tariff on Brazil (10% on April's "Liberation Day") is among the most egregious. The US has a trade surplus with it and the letter made clear a personal animosity over the treatment of former President Bolsonaro. After having …

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Capital Markets Take US Tariffs and Threats in Stride

2025-07-09

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2025-07-09

Overview: The US tariff saga continues. Yesterday, President Trump announced a 50% tariff copper, sending the red metal screaming higher (13%+), and threatening 200% tariffs on pharma. Other sectoral investigations are expected to wrap up toward the end of the month. There is a vigorous effort to check "transshipments," but it is not clear how …

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US Tariffs Stall the Greenback’s Upside Correction. RBA Surprises with Stand Pat Decision

2025-07-08

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2025-07-08

Overview: The capricious nature of the US tariffs, the tone in which they were announced, while still allowing time (August 1) to negotiate is the main talk. More tariff announcements are expected today. The dollar's upside correction was cut short, and it is weaker against nearly all the world's currencies. The jump in long-end Japanese …

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US Dollar Extends Recovery; Tariffs Loom but now August 1

2025-07-07

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2025-07-07

Overview: After last week's US jobs data and anticipation of a firm CPI reading next week, US interest rates have firmed, and the dollar begins the new week on a firm note. Meanwhile, US tariff letters from the White House may begin being delivered today. Initially, it was signaled that some letter would go out …

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Week Ahead: US Liberation Day Redux after Jobs Data Reinforce Fed’s Patience, and RBA to Cut

2025-07-05

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2025-07-05

Fresh off the passage of the the budget, judicial victories, and achieving a cease fire between Israel and Iran, the Trump administration is on the verge of closing its initial chapter in its dramatic changes of America's foreign economic policy. The 90-day hiatus since Liberation Day comes to an end in the week ahead. Ahead …

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USD is Mostly Firmer Ahead of Jobs Report for which the Market is on Notice for Downside Risks

2025-07-03

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2025-07-03

Overview: The US dollar is firm. The only G10 currency that is stronger today is sterling, which is recovering from yesterday's sharp losses and the UK's drama eased following Prime Minister Starmer's support for Chancellor Reeves. Of note most of the final June PMI readings were revised higher from the initial estimates. The US struck …

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